Indian stock market faces heavy FPI outflows amid global uncertainty

Foreign Portfolio Investors (FPIs) have withdrawn ₹20,974 crore from the Indian stock market in September so far. This follows significant investments in July and August, though total FPI outflows for 2026 have reached ₹2.45 lakh crore, surpassing the total withdrawals of 2025.

Several macroeconomic factors are driving this trend, including high US interest rates and bond yields, geopolitical tensions in West Asia, rising crude oil prices—which remain above $100 per barrel—and the weakening of the Indian rupee. The rupee has recently approached record lows against the US dollar.

Looking ahead, the Indian market faces volatility driven by US-Iran tensions, potential US tariffs on countries purchasing Russian oil, and upcoming domestic economic data such as PMI and infrastructure reports. Investors remain cautious regarding energy costs and their potential impact on inflation and economic growth.