Kamal Ghorui
Foreign portfolio investors continued to withdraw from Dalal Street this week, with net outflows amounting to Rs 35,475 crore, as Middle East tensions caused ripples across global markets and weakened investor sentiments. The persistent outflows indicate that foreign investors are adopting a more cautious stance amid an uncertain global environment, with elevated crude oil prices adding to concerns over inflation and economic stability.According to National Securities Depository Limited (NSDL) the selling trend remained consistent through the week. Monday saw the sharpest outflow at Rs 10,827 crore, followed by Rs 9,406.78 crore on Tuesday and Rs 4,376.02 crore on Wednesday. Markets were closed on Thursday on account of the Gudi Padwa festival, while Friday witnessed fresh selling worth Rs 10,965.74 crore. With this, total FPI net selling in March has climbed to Rs 88,180 crore so far, marking the highest monthly outflow recorded in 2026. The figures include transactions across exchanges after accounting for flows in primary markets and other segments. Market watchers pointed out that global cues have played a key role in shaping investor behaviour. Ongoing crisis in the Middle East, coupled with rising crude prices, have contributed to a risk-off approach among overseas investors. Vinod Nair, Head of Research at Geojit Financial Services, said, “Market sentiment remained cautious amid persistent Middle East tensions during the week, with elevated crude oil prices, and continued FII selling. Although the domestic equities saw a brief relief-led recovery on valuation comfort and short covering early in the week, the rally quickly reversed as renewed Middle East attacks pushed crude prices higher, reviving inflationary and macroeconomic concerns.“ Foreign Portfolio Investment (FPI) refers to investments made by overseas investors in financial assets such as equities, bonds and mutual funds in markets outside their home country. These investments are typically short-term and do not involve control over companies. FPIs are often described as “hot money” due to their high liquidity and ability to move quickly across markets, making them an important component of capital flows in emerging economies like India. In the country, such investments are regulated by the Securities and Exchange Board of India. The sustained withdrawals highlight the sensitivity of Indian markets to global developments, with investors continuing to track geopolitical events and movements in crude oil prices for signals on market direction.
