Foreign portfolio investors stepped up liquidations across Indian financial markets, divesting a net sum of 20,974 crore rupees from domestic equities during the first three weeks of September. Market exchange repositories showed sustained selling pressure across frontline financial, consumer, and information technology counters as overseas institutions repositioned capital allocations toward fixed-income havens.
Investment strategists pointed to a confluence of adverse macroeconomic headwinds, led by resilient benchmark United States Treasury yields and elevated Brent crude benchmarks hovering near multi-month highs. The strengthening United States dollar exerted continuous downward pressure on emerging market foreign exchange pairs, compelling overseas funds to lock in cumulative gains from earlier record-breaking market rallies on Dalal Street.
Despite substantial foreign outflows, substantial monthly inflows from domestic institutional investors and systematic investment plans cushioned benchmark indices against precipitous declines. Portfolio managers indicated that international capital flows may remain defensive until geopolitical developments in the Middle East stabilize and central bank interest rate trajectories offer clearer forward guidance.
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Sources:
https://www.thehindu.com/business/markets/fpis-turn-cautious-withdraw-20974-crore-from-equities-in-september-amid-global-uncertainty/article71487260.ece