FIIs sold about Rs 11,000 crore worth Indian stocks in 2 days of US-Iran war

In the wake of escalating tensions between the US, Israel, and Iran, Foreign Institutional Investors (FIIs) have pulled out approximately Rs 11,000 crore worth of Indian equities over two trading days in early March. On Thursday alone, FIIs sold stocks valued at Rs 8,752 crore, while Domestic Institutional Investors (DIIs) helped stabilize the market by purchasing shares worth Rs 12,068 crore. This sharp sell-off has occurred despite a brief period of optimism in February, during which FIIs had injected Rs 12,590 crore into the Indian market. The recent outflows follow a significant trend of withdrawal, with FIIs pulling out Rs 34,000 crore in January alone and over Rs 1.5 lakh crore throughout the previous year. The BSE Sensex has taken a hit, plummeting over 2,171 points, which translates to a wealth erosion of Rs 16.32 lakh crore for investors. Contributing to this market instability are rising crude oil prices, which rose by 1.63% to $82.73 per barrel, raising inflation concerns and impacting the Indian rupee. Analysts indicate that the ongoing geopolitical crisis, coupled with India’s dependency on oil imports, is fostering a climate of risk aversion among investors. While DIIs have provided some support, the market outlook remains fragile, with significant volatility expected in the near term.