FPIs open March with largest daily pullout in 4 months

ET Intelligence Group: Foreign Portfolio Investors (FPIs) resumed selling in India’s secondary equity market on March 2, resulting in the largest daily outflow of $751.4 million (₹6,832 crore) in four months. The reversal comes after FPIs pumped $2.2 billion (₹19,782 crore) into secondary equities in February, the strongest monthly inflow in 17 months. Rising geopolitical tensions have triggered a risk-off sentiment, which is expected to persist until greater clarity emerges on the current conflict in the Middle East.

Earlier, on September 1 and November 3 last year, FPIs had sold equities worth $1 billion and $857.2 million respectively in the secondary market. After being net sellers in each of the three months to January 2026, FPIs made a beeline to Indian equities in February amid hopes of thawing international trade relations. The outflow seen on the first trading day of March, therefore, triggers concerns over sustainability of foreign fund flow in the near term as a widespread geopolitical conflict is likely to affect global energy prices, and in turn, the Indian economy, which is a net energy importer.

In February, total net inflow of FPIs was $2.5 billion (₹22,615 crore) including primary and secondary markets. In six out of the 11 months of FY26, FPIs were net sellers, reflecting their subdued stance on Indian equities amid relatively higher valuations compared with some of the emerging markets. However, their selling during this period was more benign compared with the year-ago period.

For 11 months to February, FPIs sold nearly $7 billion of equities, including primary and secondary markets. It was half of $14.2 billion sold in the comparable period of the previous fiscal year. In addition, FPIs halved their investment in the primary market to $7.6 billion from the year-ago level, indicating a more cautious stance while approaching the initial public offers (IPO) and qualified institutional purchases (QIP) segments.