FPIs withdraw Rs 13,138 crore from equities in September so far amid global uncertainty

New business data points to the fact that Foreign market participants pulled out Rs 13,138 crore from Indian equities in the first half of September, as heightened global uncertainty pushed oil price marks elevated, while rising US bond yields and a firm dollar weighed on risk appetite.

The latest outflow comes after Foreign Portfolio Market participants (FPIs) turned net buyers in July and August, infusing Rs 20,200 crore and Rs 29,630 crore, respectively, according to data from the Central Depository Services (India) Ltd (CDSL).

Prior to that, FPIs remained net sellers for four consecutive months from March to June.

With the latest withdrawal, the total outflow from Indian equities by FPIs has advanced to Rs 2.37 lakh crore so far in 2026, surpassing the Rs 1.66 lakh crore withdrawn during the entire 2025, the data revealed.

According to NSDL data, FPIs withdrew Rs 13,138 crore from Indian equities in the first two weeks of September, till September 11.

Vedant Gupte, Co-Founder and CEO of investment platform Trackk, stated the September selling was fuelled more by global factors than domestic concerns.

"September selling is a dollar-and-crude story, not an India story. When US yields firm up and oil climbs, money leaves every emerging market," he stated.

Brent crude surged to USD 109.97 per barrel on Friday and continued to stay above USD 102 per barrel, its July-high level, amid heightened geopolitical uncertainty.

Rising bond yields and a high probability of a interest-rate gain at the US FOMC meeting over the upcoming week have additionally weighed on investor sentiment, stated Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.

Looking ahead, FPI flows are likely to be significantly influenced by the Iran-US conflict and its consequent impact on oil price marks.

"Elevated crude prices (Brent is above USD 108) and elevated inflation imply tighter monetary policy, which means bond yields will climb further," V K Vijayakumar, Chief Investment Strategist at Geojit Investments, stated.

"If the US 10-year bond inches up to 5 per cent, there can be a sharp correction in equity markets globally. In such a scenario, FPIs may turn sellers and move money to high-yielding bonds," he further noted.

Foreign market participants additionally extended their selling to the debt market during the period under review. They withdrew Rs 1,350 crore through the Fully Accessible Route (FAR) and Rs 955 crore through the general route, while investing Rs 29 crore through the Voluntary Retention Route (VRR).