Foreign portfolio investors pulled out a record Rs 1.18 lakh crore in March, driving the Sensex down 2.22% to 71,947.55 and Nifty 2.14% to 22,331.40 on Monday. The rupee breached 95 intra-day before closing at 94.83 against the dollar. Elevated crude prices above $100 per barrel due to the West Asia conflict added pressure.
Foreign portfolio investors withdrew about Rs 1.18 lakh crore ($12.7 billion) from Indian equities in March amid global uncertainty and West Asia tensions. This fueled market volatility and soured sentiment, with FPIs offloading Rs 1.31 lakh crore ($14.2 billion) worth of shares so far in 2026. The Nifty 50 and Sensex have declined 14-16% over that period.
On Monday, the Sensex fell 2.22% to 71,947.55—its lowest close since February 14, 2024, when it was at 71,822—and the Nifty dropped 2.14% to 22,331.40. Markets are down 12.52% since the West Asia war began in late February. Domestic institutions, including LIC and mutual funds, bought Rs 1.3 lakh crore in equities during the month.
Crude prices have hovered above $100 per barrel for nearly a month, with India's oil basket averaging $112/bbl in March, up from $69 in February, per Ministry of Petroleum and Natural Gas data. This has widened India's fiscal deficit.
An analyst at a research house noted, “FPIs were sellers in other emerging markets like Taiwan and South Korea. There is a risk-off trend in equity markets globally after the war broke out in West Asia.” They added, “Poor returns from India versus other markets over the last 18 months is the principal reason for FPI indifference. For their selling strategy to change, hostilities in West Asia must end and crude prices decline.”