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FPI Sell-Off Hits Record Rs 1.17 Lakh Crore in March, Outflows Continue

Foreign Portfolio Investors set a record by selling Indian equities worth Rs 1,17,775 crore in March, with net outflows continuing into April. The sustained selling is driven by the West Asia conflict, surging crude oil prices above $100 a barrel, and a depreciating rupee. Experts note these factors have created an unfavorable environment, triggering the historic sell-off. While the correction has made some market valuations attractive, analysts say FPI inflows will only resume with a de-escalation in geopolitical tensions and a decline in crude prices.

Key Points: Record FPI Outflows in March, Sell-Off Continues in April

  • Record Rs 1.17 lakh crore FPI sell-off in March
  • Geopolitical conflict and crude above $100 driving outflows
  • Rupee depreciation accelerating foreign selling
  • Market corrections making some valuations attractive
  • Future inflows hinge on de-escalation of war risks
2 min read

FPI sell-off continues in April; March outflows hit record Rs 1.17 lakh crore: NSDL data

Foreign investors sold a record Rs 1.17 lakh crore in Indian equities in March, with outflows continuing in April due to geopolitical risks and high crude prices.

"March witnessed massive selling by FPIs. This is the biggest ever monthly selling by FPIs. - VK Vijayakumar"

New Delhi, April 5

Foreign portfolio investors 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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Reader Comments

S
Sarah B
As an NRI investor, I've been watching this closely. The geopolitical risks are real, but I feel this is also a classic case of herd mentality. Once the global situation stabilizes, the money will flow back. India's long-term growth story remains intact.
V
Vikram M
The expert is right about valuations becoming fair. Maybe this is a good time for Indian retail investors to start SIPs in good companies. When foreign investors are fearful, we should be looking for opportunities. "Be greedy when others are fearful" as they say.
P
Priya S
This highlights our vulnerability to global oil prices. We really need to accelerate our shift to renewable energy and reduce this dependency. Every time there's a crisis in West Asia, our economy takes a hit. Time for some serious energy independence planning.
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Rohit P
Respectfully, while global factors are to blame, I think our policymakers could have been more proactive. The RBI's interventions seem reactive. A stronger communication strategy to reassure markets might have helped cushion the fall somewhat. Just my two paise.
M
Michael C
Working in the finance sector in Mumbai, I see this firsthand. The sentiment on the trading floor is cautious but not panicked. Domestic institutions and mutual funds have been buying the dip, which is providing some support. The Indian market is maturing.
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