The beginning of April has been like a nightmare for the Indian stock market. On one hand, investors were keeping their hopes high from the new financial year, on the other hand, foreign portfolio investors (FPIs) have created a stir by withdrawing money from the market. In just two trading sessions in the beginning of April, foreign investors have withdrawn a huge amount of ₹19,837 crore (about $2.1 billion).
Let us tell you that this sale is not a sudden incident. Earlier, the month of March had been the worst in the history of the Indian market, when foreign investors had withdrawn a record ₹ 1.17 lakh crore. A total of ₹1.5 lakh crore has been withdrawn since the beginning of the year 2026. This figure is scary because the situation had improved somewhat in February, but the global situation has turned the tables again.
3 big reasons for foreign investors to flee
- conflict in west asia: The ongoing war in the Middle East and rising geopolitical tensions have spooked investors. Whenever there are war-like situations, investors move money out of risky markets (like the stock market) and run towards safer options.
- crude oil prices: Crude oil prices have crossed $100. India imports most of the oil it needs, so expensive oil is harmful for both our economy and the market.
- weakening rupee: Rupee is continuously falling against the dollar. It has declined by about 4% since the war began. Due to the falling rupee, foreign investors start finding their investments in India a loss-making deal.
The allure of the US bond market
According to Himanshu Srivastava of Morningstar Investment Research India, the Indian market has also been affected by the rise in bond yields in the US. When investors get good returns on fixed-income in a safe market like the US, they find it better to take out their money from the equity market and invest there.
Is now the right time to invest?
VK Vijayakumar, Chief Investment Strategist of Geojit Investments, says that due to this continuous selling, the valuation of the Indian market has now become quite reasonable. Shares in some sectors are now available at attractive prices. However, he also believes that foreign investment will return only when the war stops and crude oil prices fall.