Foreign investors pull Rs 7,443 crore from Indian equities, ending two-month rally

Foreign portfolio investors (FPIs) have ended a two-month buying spree in Indian equities, marking a significant shift in market sentiment. The reversal saw investors pulling Rs 7,443 crore from domestic stock markets, signaling growing caution among global fund managers.

The pullback coincides with a sharp rise in crude oil prices, which has triggered fresh concerns about India's inflation outlook and current account deficit. Higher oil prices typically increase import costs for the country, putting pressure on both consumer price growth and the balance of payments position.

The shift underscores the vulnerability of Indian equity markets to global commodity price movements and external economic headwinds. Energy price volatility continues to pose challenges for India's macroeconomic stability, particularly given the country's reliance on imported oil for meeting domestic energy demands.

Market analysts will be watching closely for further FPI flows in coming weeks, as investor sentiment hinges on developments in global oil markets and their implications for India's inflation trajectory. The rupee and equity valuations remain sensitive to external capital flows and crude price movements.