Foreign portfolio investor (FPI) flows turned negative in September, with investors withdrawing Rs 14,474 crore through exchanges up to September 12, amid escalating tensions in the Middle East and concerns over rising crude oil prices.
The outflows come after FPIs recorded positive flows in July and August. However, analysts said investment through the primary market has continued in September, based on early indications.
FPI investment through the primary market stood at Rs 1,336 crore up to September 12, taking total investment through the primary market this year to Rs 47,183 crore, according to exchange data.
Meanwhile, Indian equity markets remained under pressure during the week, with the Nifty 50 extending its losing streak to five consecutive weeks.
Escalating tensions in the Middle East triggered a sharp rise in crude oil prices, intensifying concerns over inflation, global interest rates and economic growth. The sell-off was broad-based, with major sectors ending lower during the week.
Market participants said crude oil has emerged as the dominant headwind for domestic equities, while continued selling by foreign institutional investors has added to the pressure on the market.
In contrast, domestic institutional investors (DIIs) provided support by recording net purchases of Rs 6,419.46 crore during the week, cushioning the impact of foreign selling and limiting further downside in the domestic equity market.
Going ahead, FPI flows are expected to be significantly influenced by developments in the Iran-US conflict and their impact on crude oil prices.
Global macroeconomic and geopolitical risks are likely to keep Indian equities under pressure in the coming week, with crude oil prices, developments in the Middle East and changing expectations around US monetary policy expected to remain key drivers of market sentiment. (IANS)
