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Foreign portfolio investors (FPIs) continued heavy selling in Indian equities this week, with net outflows of Rs 23,801 crore, as global uncertainties and rising crude oil prices weighed on investor sentiment.
According to data from National Securities Depository Limited, FPIs had already offloaded equities worth Rs 1,17,775 crore in March, marking the highest level of selling recorded this year. The sustained selling trend has been largely driven by the ongoing conflict in West Asia, with no clear signs of de-escalation. The surge in crude oil prices and weakening of the rupee have further added pressure on Indian markets, prompting foreign investors to reduce exposure. Market experts noted that elevated geopolitical risks, rising energy prices and currency depreciation have created an unfavourable environment for foreign investments. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said March witnessed unprecedented selling by FPIs. "March witnessed massive selling by FPIs. This is the biggest ever monthly selling by FPIs. Continuation of the war, crude again spiking to above USD 100 level, the steady decline in the rupee and appreciation of the dollar triggered this record selling by FPIs," he said. He further added that currency weakness has played a key role in accelerating outflows. "Rupee depreciated by about 4 per cent since the war began and fears of further depreciation has added to the weakness of the rupee, which, in turn, is triggering further selling by FPIs," Vijayakumar noted. The rise in crude oil prices, particularly above the USD 100 per barrel mark, has increased concerns over inflation and India's import bill, given the country's dependence on imported energy. This has also contributed to pressure on the rupee and overall market sentiment. Despite the continued selling, experts believe that the correction in markets has made valuations more reasonable. "Sustained selling by the FPIs have made Indian market valuations fair and in some segments attractive. But FPI inflows can happen only when there is de-escalation on the war front leading to decline in crude," Vijayakumar added. The trend indicates that global factors, particularly geopolitical tensions and energy price movements, are currently driving foreign investor behaviour in Indian markets, while future inflows will depend on the easing of these risks. (ANI)
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