The Crossbill News Desk
Foreign portfolio investors (FPIs) maintained a strong selling trend in Indian equity markets through April, withdrawing Rs 60,847 crore amid mounting global uncertainty triggered by rising crude oil prices linked to tensions in West Asia.
Market analysts say the continued outflows reflect investor caution toward an economy heavily dependent on oil imports, as energy price volatility weighs on sentiment and currency stability.
Data cited by PTI from the National Securities Depository Limited showed that FPIs have pulled out nearly Rs 1.92 lakh crore from Indian equities during the first four months of 2026, already exceeding last year’s total sell-off of Rs 1.66 lakh crore.
The pressure intensified after March, when global geopolitical tensions escalated following the February 28 conflict involving the United States, Israel and Iran, prompting record equity sales of Rs 1.17 lakh crore during that month alone.
Persistent capital outflows have also affected the Indian currency. Despite regulatory measures introduced by the Reserve Bank of India in March to stabilise markets, the rupee weakened to a record low of 95.33 against the US dollar on Thursday (April 30), driven by higher oil prices and hawkish signals from members of the US Federal Reserve.
Analysts quoted by Reuters warned that prolonged currency weakness “may also drive a negative feedback loop on foreign capital flows by eroding overseas investors’ returns while adding to inflationary pressures by lifting import prices”.
Sector-wise data indicated that financial stocks bore the brunt of foreign selling, accounting for Rs 79,981 crore in outflows, followed by technology shares which saw sales worth Rs 21,980 crore. At the same time, domestic institutional investors helped cushion the market impact.
“Domestic institutional buying has helped steady markets, with record local purchases of $15.4 billion [Rs 1.46 lakh crore] in March offsetting the highest-ever monthly foreign outflows of $12.7 billion [Rs 1.2 lakh crore],” the report noted.
The RBI’s continued interventions to defend the rupee have also altered its foreign exchange positioning.
According to Financial Express, the central bank’s dollar short forward positions rose by 34% in March to $104.16 billion, marking the first instance of the figure crossing the $100 billion mark.
Market observers say the trajectory of foreign investment flows will largely depend on global energy prices, geopolitical stability and monetary policy signals in the coming months, as investors reassess risk exposure in emerging markets like India.
Market analysts say the continued outflows reflect investor caution toward an economy heavily dependent on oil imports, as energy price volatility weighs on sentiment and currency stability.
Data cited by PTI from the National Securities Depository Limited showed that FPIs have pulled out nearly Rs 1.92 lakh crore from Indian equities during the first four months of 2026, already exceeding last year’s total sell-off of Rs 1.66 lakh crore.
The pressure intensified after March, when global geopolitical tensions escalated following the February 28 conflict involving the United States, Israel and Iran, prompting record equity sales of Rs 1.17 lakh crore during that month alone.
Persistent capital outflows have also affected the Indian currency. Despite regulatory measures introduced by the Reserve Bank of India in March to stabilise markets, the rupee weakened to a record low of 95.33 against the US dollar on Thursday (April 30), driven by higher oil prices and hawkish signals from members of the US Federal Reserve.
Analysts quoted by Reuters warned that prolonged currency weakness “may also drive a negative feedback loop on foreign capital flows by eroding overseas investors’ returns while adding to inflationary pressures by lifting import prices”.
Sector-wise data indicated that financial stocks bore the brunt of foreign selling, accounting for Rs 79,981 crore in outflows, followed by technology shares which saw sales worth Rs 21,980 crore. At the same time, domestic institutional investors helped cushion the market impact.
“Domestic institutional buying has helped steady markets, with record local purchases of $15.4 billion [Rs 1.46 lakh crore] in March offsetting the highest-ever monthly foreign outflows of $12.7 billion [Rs 1.2 lakh crore],” the report noted.
The RBI’s continued interventions to defend the rupee have also altered its foreign exchange positioning.
According to Financial Express, the central bank’s dollar short forward positions rose by 34% in March to $104.16 billion, marking the first instance of the figure crossing the $100 billion mark.
Market observers say the trajectory of foreign investment flows will largely depend on global energy prices, geopolitical stability and monetary policy signals in the coming months, as investors reassess risk exposure in emerging markets like India.
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