Geopolitical jitters spark heavy FPI selling in India

New Delhi: Foreign portfolio investors (FPIs) have pulled out Rs88,180 crore (about $9.6 billion) from Indian equities so far in March, taking total outflows in 2026 past the Rs1 lakh crore mark, according to NSDL data.

The sustained selling comes after a strong rebound in February, when FPIs had invested Rs22,615 crore, the highest monthly inflow in 17 months. In March, however, foreign investors have remained net sellers on every trading day till March 20, reflecting a sharp reversal in sentiment.

Market participants attributed the outflows to escalating geopolitical tensions in West Asia, a weakening rupee, and concerns over the impact of elevated crude oil prices on India’s growth and corporate earnings. Brent crude rising above $100 amid fears of disruption in the Strait of Hormuz has triggered a global risk-off mood.

Analysts also pointed to rising US Treasury yields, which have improved the attractiveness of dollar-denominated assets and led to capital moving away from emerging markets such as India. The rupee hovering near Rs92 against the US dollar, profit-booking after February’s rally, and a mixed Q4 earnings outlook have further weighed on investor sentiment.

Sectorally, financial services saw the heaviest selling, with FPIs offloading shares worth Rs31,831 crore in the fortnight ended March 15.

Despite the sharp withdrawals, March outflows remain slightly below the record monthly exodus of Rs94,017 crore seen in October 2024. Analysts expect volatility to persist in the near term, with any de-escalation in geopolitical tensions, support from domestic institutional investors, or better-than-expected earnings likely to stabilise flows.