Following initial market shocks from West Asia conflict, Indian equities saw major foreign investor outflows and remain volatile amid rising oil prices. FPIs withdrew $751.4 million on March 2—the largest daily pullout in four months—with markets resuming post-Holi holiday on March 4 under continued pressure.
Building on the sharp declines triggered by US-Israeli strikes on Iran—including the Strait of Hormuz closure and oil surging to $82.40—the Indian stock market continues to face volatility. On March 2, foreign portfolio investors (FPIs) pulled out $751.4 million from equities, reversing February's inflows and marking the biggest daily withdrawal in four months.
Nearly 80% of Indian stocks, especially small- and midcaps, are now in bear market territory amid prolonged selling. Major indices like Nifty and Sensex saw modest declines, but company fundamentals remain solid. FY26 FPI selling has been less intense than the prior year, indicating caution rather than panic.
After the March 3 Holi holiday, markets reopened weakly on March 4, tracking Asian sell-offs. Nifty breached supports at 24,600-24,300, appearing oversold.
Analysts urge long-term investors to pick strong-fundamental stocks on dips, expecting stabilization as geopolitical risks ease. Opportunities persist despite oil shocks.