Foreign investors pull out Rs 45,125 crore from Indian stocks in early October

Foreign investors dumped Indian equities worth Rs 45,125 crore during the first six trading days of October, almost matching the outflows recorded in September. The pull‑back adds fresh pressure to the Sensex and Nifty, which have already been rattled by rising US Treasury yields. Higher yields on US bonds make dollar‑denominated assets comparatively more attractive, prompting some overseas funds to shift money out of Indian stocks. Crude oil prices have also stayed elevated, raising input costs for Indian companies and further denting market confidence. Analysts say the next wave of data – especially upcoming Indian inflation numbers – could either deepen the sell‑off or offer a brief respite if they show easing price pressures. Geopolitical developments, such as tensions in the Middle East, are being watched for their impact on risk appetite among foreign investors. The sustained pressure has kept the benchmark indices hovering near recent lows. Some market watchers suggest that policy measures announced in the upcoming budget could help reverse the trend if they boost investor sentiment.

Context

Foreign Institutional Investors (FIIs) are a major source of liquidity for Indian equities; large inflows or outflows can move indices quickly. When US yields rise, Indian assets often face outflows because foreign funds seek higher returns abroad. Similarly, spikes in oil prices raise costs for Indian firms, adding to the bearish sentiment.