FII Selling In India: The foreign institutional investors (FIIs) have withdrawn nearly Rs 90,000 crore from the equity markets so far in March amid the ongoing West Asia conflict, which has pushed up crude oil prices and raised concerns over macroeconomic stability.
FIIs sold equities worth Rs 5,518.39 crore on Friday, while the domestic Institutional Investors (DIIs) purchased shares worth Rs 5,706.23 crore.
Overall, foreign investors have pulled out Rs 88,180 crore from Indian equities in the month so far.
FIIs have remained consistent sellers, with outflows in the secondary market reaching up to Rs 2.5 lakh crore in 2025.
Market participants said the sustained selling has been driven by a mix of global and domestic factors, including rising oil prices, depreciation in the rupee, and shifting global capital flows.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the conflict in West Asia has intensified selling by foreign portfolio investors (FPIs).
"The volume and intensity of FPI selling increased in recent days as the conflict escalated. FPIs were net sellers on all trading days in March. The total FPI selling through exchanges till March 20 stood at over Rs 90,000 crore," he said.
He added that weakness in global equity markets, steady depreciation of the rupee, and concerns over the impact of elevated crude oil prices on India’s growth and corporate earnings have weighed on investor sentiment.
According to him, relatively poor returns from Indian markets compared to other developed and emerging markets over the past 18 months have also contributed to FPI outflows. A sustained reversal in this trend would require clear signs of earnings recovery, which may take time under the current uncertain conditions.
He further noted that FPIs have been selling across sectors without factoring in valuations. During the fortnight ended March 15, FPIs sold financial services stocks worth Rs 31,831 crore. Despite stable fundamentals and fair valuations, the sector witnessed heavy selling as it accounts for a significant share of FPI holdings and offers liquidity for exits.
A reversal in FPI selling is likely only after the conflict subsides and market conditions stabilise, he added.
The West Asia conflict has now entered its fourth week and continues to influence global markets. Investor sentiment remains sensitive to developments in the region.
Iran has warned of retaliatory action on regional infrastructure if the United States proceeds with its position on the Strait of Hormuz. US President Donald Trump has indicated action if the Strait is not fully reopened.
