Foreign investors pull $2.7 bn from Indian stocks in September

Foreign portfolio investors withdrew $2.7 billion from Indian equities in September, the biggest pull‑out in the last six months. The outflow came as crude oil prices jumped and central banks abroad tightened monetary policy. Higher oil costs are squeezing India’s current‑account balance and pushing up inflation expectations. The pressure on inflation and the current account is dragging the rupee lower. The combined effect of oil price spikes and tighter global financing conditions has made foreign investors cautious about Indian stocks.

Context

Rising oil prices raise the cost of imports for India, which widens the current‑account gap and fuels price pressures. When global interest rates climb, investors often shift money to safer assets, reducing demand for emerging‑market equities like those in India.