FPI Selling Hits ₹14,474 Crore In September, Middle East Tensions And Crude Surge Rattle Markets

In September, foreign portfolio investors (FPIs) pulled Rs 14,474 crore out of Indian equities, marking a shift from the positive inflows seen in the previous two months. This trend was exacerbated by rising tensions in the Middle East, surging crude oil prices, and broader concerns about inflation and interest rates. Despite the FPI selling spree on the stock exchanges, they continued to pour money into the primary market, investing Rs 1,336 crore up to September 12. This brought their total investment in the primary market to Rs 47,183 crore so far this year.

The Nifty 50 index suffered its fifth consecutive weekly decline, with broad-based selling across major sectors. The major concern for the market was the sharp increase in crude oil prices, following heightened Middle East tensions. Brent crude prices breached the USD 108 a barrel mark, raising concerns over India's inflation outlook and economic growth.

Higher oil prices pose a particular challenge for India due to its heavy reliance on crude imports. Domestic institutional investors (DIIs) provided some relief by recording net purchases of Rs 6,419.46 crore during the previous week. However, FPI flows in the coming sessions are expected to remain closely tied to developments in the Iran-US conflict and their impact on crude prices.

Despite the market risks, FPIs remain optimistic about India's appeal, buoyed by the slowdown in global chip trade and their overall confidence in the country's growth prospects.