Rising Oil Prices And Bond Yields Weigh On Foreign Investor Sentiment
Add Preferred News Source
Foreign investors withdrew ₹25,662 crore from Indian equities in September as oil prices and bond yields rose. Learn what is driving FPI selling and read more.
Foreign investors pulled ₹25,662 crore ($2.7 billion) out of Indian shares in September, ending a two-month run of buying. It was the largest monthly withdrawal in six months. Data from the National Securities Depository Ltd showed that foreign portfolio investors had taken $26.75 billion out of Indian equities in 2026 as of 29 September.
The latest FPI outflow came as Indian stocks also had a difficult month. The Nifty 50 and Sensex each lost about 5.7% in September. Higher oil prices and rising bond yields have made the market harder for overseas investors to navigate. Some foreign money has also moved towards South Korea and Taiwan, where investors have been chasing companies linked to the artificial intelligence boom.
Why Is Foreign Money Leaving India?
US Treasury yields are part of the story. When yields go up, dollar-denominated investments start looking more attractive, especially when investors are weighing the risks of investing in emerging economies.
Recent signals from the Fed have also reduced expectations of an interest-rate cut. That can affect emerging markets in two ways: funding becomes more expensive, and less money is available for riskier investments.
India is also dealing with a problem closer to home.
Higher Oil Prices Add To Pressure
India imports much of the crude oil it consumes. A rise in Brent prices, therefore, means a larger import bill and can put pressure on both inflation and the current account.
The rupee is another concern for foreign investors. If the currency loses value, an investment that has gained in rupee terms can still produce a smaller return when converted into dollars. This has added to concerns around foreign investors selling Indian stocks.
In any case, pressure seems to be coming from multiple angles: high oil costs, higher global yields, a depreciating currency, and competition for investment in other markets.
Also Read - PCI Infraprojects IPO: DRHP Filed For Up To 1.15 Crore Equity Shares
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
Right Tools, Rich Insights
