12 September,2026 07:02 PM IST | Mumbai | mid-day online correspondent
Representational Image. File pic.
Amid the renewed tensions between US and Iran that has caused a sharp spike in the crude oil prices and the higher global bond yields, Foreign Portfolio Investors (FPI) are turning sellers in the Indian equity markets, according to analysts.
"There are indications of FPI flows again turning negative after the positive flows in July and August. NSDL data up to 12th September shows FPI outflows of Rs 14,474 crore via selling through the exchanges," V K Vijayakumar, Chief Investment Strategist, Geojit Investments said.
However, the booming activity in the primary markets with nearly 12 mainboard IPOs valued at over Rs 7000 crore during the week diverted the investor sentiment from the secondary market, he noted.
"The trend of FPI investment through the primary market has been continuing in September also as per early indications. FPI investment through the primary market up to September 12 stood at Rs 1,336 crore taking the total investment through the primary market this year to Rs 47,183 crore," he said.
Going forward, FPI flows will continue to monitor US-Iran conflict and the consequent impact on crude prices.
"Elevated crude prices, Brent is above USD 108, and higher inflation implies tighter monetary policy, which means bond yields will rise further. If the US 10-year 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 said.
Meanwhile, Foreign Institutional Investors (FIIs) continued to be sellers in the domestic equity market for the fourth consecutive week offloading Rs 1,795 crore worth equities during September 7 to 11.
"FIIs ended the week as net sellers for the fourth consecutive week, offloading Rs 1,795 crore, with four of the five sessions closing in the red. Domestic Institutional Investors (DIIs) stayed on the buy side, extending their streak with accumulation of Rs 6,419 crore, though this was a sharp step down from the Rs 23,156 crore deployed the previous week," Pabitro Mukherjee, Deputy Vice President Research, Bajaj Broking said.
He noted that despite the cushion provide by the DIIs, it was not enough to arrest the decline in the benchmark index Nifty on Friday, when DII buying peaked at Rs 1968 crore against the week's largest FII sale of Rs 931 crore.
The domestic equity benchmark indices extended losses for the fifth straight week amid a surge in global crude oil prices that hit a four-week high on Friday due to the heightened tensions between US and Iran, and higher US bond yield rates.
During the week, the Sensex tumbled 1,733.67 points or 2.27 per cent, while the Nifty slipped 499.60 points or 2.09 per cent. The indices declined on four out of the five days during last week.
On Friday, the market indices however recovered from their intraday lows to minimise the fall as the crude oil prices eased. The 30-share BSE Sensex dropped 120.83 points or 0.16 per cent to end at 74,781.76, while the 50-share NSE Nifty slipped 79.70 points or 0.34 per cent to settle at 23,398.10.
In terms of month to date, Mukherjee noted that FIIs remained marginal net buyers at Rs 579 crore, largely based on the Rs 6,688 crore inflow on September 2.
"Excluding that single session, they are net sellers of Rs 6,110 crore. DIIs have bought Rs 24987 crore across all nine sessions, taking combined institutional inflows to Rs 25,566 crore, even as the Nifty shed 682.3 points or 2.8 per cent from its August close of 24,080.40, with seven of the nine sessions negative," he said.
"Over the last five weeks, FIIs were net buyers only in the first (August 10-14) before turning net sellers in each of the four that followed, while DIIs have bought without a break since August 11, a run of 24 sessions. The index has nonetheless fallen in every one of those weeks, with 18 of 24 sessions ending lower indicating that domestic absorption has cushioned rather than countered the downtrend," he added.
According to Mukherjee, market participants will track India's CPI inflation data for market direction and institutional flows, along with crude oil prices, the US-Iran conflict and the US Federal Open Market Committee decision on interest rates.
