New Delhi, March 8 (NationPress) In a significant move, foreign portfolio investors have pulled out Rs 21,831 crore from Indian equities over the past week, spanning four trading sessions. This trend is attributed to a downturn in global risk sentiment linked to rising tensions in West Asia, according to exchange data.

This recent withdrawal comes on the heels of a robust February, where FPIs had injected Rs 22,615 crore into Indian markets, marking the highest monthly influx in 17 months.

Prior to February, foreign investors had been net sellers for three consecutive months, retracting Rs 35,962 crore in January, Rs 22,611 crore in December, and Rs 3,765 crore in November.

In contrast, domestic institutional investors (DIIs) have stepped up their game, contributing approximately Rs 32,786 crore in March, buoyed by consistent SIP flows and long-term domestic engagement.

Market analysts have linked the sell-off in March to escalating geopolitical tensions following military actions by the US and Israel against Iran. This escalation has raised concerns about potential supply disruptions via the Strait of Hormuz, leading to Brent crude prices surging past $90 a barrel.

Saad al-Kaabi, Qatar's energy minister, had previously cautioned that a prolonged conflict in the Middle East could prompt Gulf exporters to declare force majeure, which could halt deliveries and drive oil prices up to $150 a barrel and natural gas to $40 per MMBtu within a short span.

Furthermore, analysts noted that the depreciation of the rupee, which dipped below the 92-per-dollar mark, and rising US Treasury yields have diverted capital towards safer assets.

Increasing oil prices pose significant risks for inflation, the current-account deficit, and currency stability, all of which can adversely affect foreign investor confidence in emerging markets.

Looking ahead, analysts believe that FPIs are unlikely to resume their role as net buyers until the geopolitical landscape becomes clearer.

On the domestic economic front, indicators remain largely favorable despite international uncertainties. India's GDP grew by 7.8 percent in Q3 FY26 under the revised base series, up from 7.4 percent a year earlier. Additionally, GST collections increased by 8.1 percent year-on-year, reaching over Rs 1.83 lakh crore in February, reflecting ongoing economic activity. However, the industrial momentum showed signs of slowing, with IIP growth decreasing to 4.8 percent in January from 7.8 percent in December.