West The increasing tension in Asia is having a very bad effect on the domestic stock market. Foreign portfolio investors (FPIs) have withdrawn Rs 88,180 crore from the Indian stock market so far in March amid fears that the war-induced weakening rupee and rising crude oil prices will impact India’s growth and corporate earnings. According to NSDL data, these withdrawals by FPIs have been seen after the purchases made by them in February. Foreign portfolio investors had invested Rs 22,615 crore in Indian stocks in February, the highest figure in 17 months. Let us tell you that last week flat trading was seen in the domestic stock market.
FPI withdrawals will cross Rs 1 lakh crore in 2026
With the ongoing withdrawals in March, FPIs have withdrawn more than Rs 1 lakh crore from the Indian stock market so far in 2026. In March (till March 20), FPIs were net sellers in every trading session. During this period, he has withdrawn money by selling shares worth Rs 88,180 crore. Let us tell you that FPI had made a record withdrawal of Rs 94,017 crore in October last year. Waqarjaved Khan of Angel One said that the main reason for FPI withdrawal is West Asia tension. Apart from this, due to the closure of the Strait of Hormuz, crude oil prices have crossed $ 100 per barrel, due to which FPIs are avoiding taking risks.
Increase in US bond yields is also a major reason for selling
Himanshu Srivastava, Chief Manager (Research), Morningstar Investment Research India, said rising US bond yields are another major reason for FPI withdrawal. Higher yields have increased the attractiveness of dollar assets, drawing FPIs from emerging markets like India. Expressing similar concerns, Geojit Investments’ V.K. Vijayakumar said that the conflict in West Asia has accelerated the selling of FPIs. He said weakness in global markets, continuous depreciation of the rupee and fears of higher crude oil prices impacting India’s growth and corporate earnings have affected investor sentiment.