Foreign Investors Pull $3.2 Billion From Indian Markets as Oil Rally Returns

September 30, 2026 at 02:30 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Foreign investors pulled an estimated $3.2 billion from Indian stocks and bonds in September, the largest monthly outflow since March. The selloff came as Brent crude climbed above $100 per barrel, reviving pressure on the rupee and Indian asset prices.

Key Facts

Foreign investors sold an estimated $2.1 billion of Indian stocks and $1.1 billion of index-eligible sovereign bonds in September, according to Clearing Corporation of India data compiled by Bloomberg.
Brent crude traded at $103 per barrel and WTI at $89 per barrel in Asian trading on Wednesday, with both benchmarks set for a monthly gain.
The Indian rupee has been one of the worst-performing Asian currencies in the third quarter amid surging oil prices and economic pressures.
India recorded its largest foreign inflows of the year in June, coinciding with a three-week reopening of the Strait of Hormuz and lower oil prices.
UBS head of global markets India Gautam Chhaochharia said oil will be the biggest factor determining whether India sees renewed foreign outflows.

September Outflows

Foreign investors pulled an estimated $3.2 billion from Indian stocks and bonds in September, the highest monthly pace since March. The selloff comprised $2.1 billion in equities and $1.1 billion in index-eligible sovereign bonds, according to Clearing Corporation of India data compiled by Bloomberg. The outflows followed four consecutive months of inflows from April through July, including a record inflow in June. The June inflows coincided with a three-week reopening of the Strait of Hormuz and a decline in oil prices.

Oil Price Pressure

Brent crude rose above $100 per barrel in September amid renewed Middle East hostilities and no pathway to peace. In Asian trading on Wednesday, Brent traded at $103 per barrel and WTI at $89 per barrel, with both benchmarks set for a monthly gain. Higher oil prices, inflation, and rising global yields are triggering renewed investor outflows from Indian assets. The Indian rupee has been one of the worst performers in Asia in the third quarter amid surging oil prices and persistent economic pressures.

Market Outlook

UBS head of global markets India Gautam Chhaochharia told Bloomberg that oil will be the biggest factor determining whether India sees renewed foreign outflows. High oil prices are set to limit any meaningful gains in Indian stocks in the coming weeks and months, according to UBS. Uncertainty about Middle East oil flows remains high and global fuel markets are tightening further.