Foreign portfolio investors (FPIs) have made heavy sales from the Indian stock market in early March amid the Iran and Israel war. According to the latest data, between March 2 and 6, FPIs sold shares worth about Rs 21,000 crore in the cash market.
Foreign portfolio investors (FPIs) have made heavy sales from the Indian stock market in early March amid the Iran and Israel war. According to the latest data, between March 2 and 6, FPIs sold shares worth about Rs 21,000 crore in the cash market. The selloff came at a time when foreign investors had invested Rs 22,615 crore in Indian equities in February, the largest monthly investment in the last 17 months. Earlier, FPIs were making net sales for three consecutive months. He had sold Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November in the stock market.
Market experts say that the main reason for the latest selling is the increasing geopolitical tension in West Asia. The conflict in the region intensified after the major attack on Iran by the US and Israel on February 28, which has increased the trend of risk aversion in the global market. Experts say that due to fears of possible obstacles in the Strait of Hormuz, the price of Brent crude reached above $ 90 per barrel, which increased the concern of investors.
Crude oil prices a concern for India
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Apart from this, weakening of rupee from 92 level against the dollar, increase in US treasury yield and mixed signals regarding corporate results for the fourth quarter of the financial year 2025-26 have also led to selling by foreign investors. Experts believe that high crude oil prices increase risks related to inflation, current account deficit and currency stability for India, which weakens the confidence of foreign investors in emerging markets.
Received support from domestic investors
However, despite the selling by foreign investors, the market is getting some support due to regular investments coming in through domestic institutional investors (DIIs) and SIPs of mutual funds. Analysts say that unless the situation in West Asia becomes clear and crude oil prices soften, the chances of return of foreign investors appear unlikely.
(Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.)
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