Indian equities saw a significant net withdrawal of ₹13,138 crore in September’s first half, driven by global factors like rising crude oil prices, US bond yields, and a strengthening dollar, highlighting the fragility of emerging market sentiment amid global uncertainties.
Foreign investors sold ₹13,138 crore worth of Indian equities in the first half of September, extending a pattern of selling that has been driven largely by global market conditions rather than domestic news, according to The Hindu BusinessLine. The retreat came as crude oil prices rose, US bond yields climbed and the dollar firmed, all of which weakened appetite for risk across emerging markets.
The latest withdrawals follow two consecutive months of buying, when foreign portfolio investors added ₹20,200 crore in July and ₹29,630 crore in August, after four straight months of net selling from March to June, BusinessLine reported. Data cited by the paper show that the September outflow has taken the year-to-date total to ₹2.37 lakh crore, already above the ₹1.66 lakh crore pulled from Indian equities in all of 2025.
Other reports had already pointed to a sharp early-month reversal. The Times of India, Rediff, Moneycontrol and Mint all said FPIs sold about ₹7,443 crore in the first week of September, blaming the same mix of higher crude, stronger US yields and a firmer dollar. BusinessLine’s later figure suggests the selling intensified as the month progressed.
Market strategists said the backdrop remains fragile. Vedant Gupte, co-founder and chief executive of Trackk, told BusinessLine that the move was “a dollar-and-crude story, not an India story”, arguing that higher US yields and oil prices tend to push money out of emerging markets. Pabitro Mukherjee of Bajaj Broking said expectations of a rate increase at the next US Federal Open Market Committee meeting were also weighing on sentiment, while V K Vijayakumar of Geojit Investments warned that further gains in oil and US bond yields could trigger a sharper global equity correction.
The pressure has not been limited to stocks. BusinessLine said foreign investors also sold debt, withdrawing ₹1,350 crore through the Fully Accessible Route and ₹955 crore through the general route, while adding a small ₹29 crore through the Voluntary Retention Route.
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