FIIs pour Rs 22,615 crore into Indian equities in February. Can Iran-Israel conflict flip the trend?

Though Overseas Institutional Traders (FIIs) turned internet consumers in February, choosing up Indian equities price Rs 22,615 crore throughout the month, Friday’s sharp sell-off has solid doubt on the sustainability of that pattern reversal. With the Iran-Israel conflict escalating over the weekend, danger urge for food might take a again seat, prompting overseas buyers to undertake a wait-and-watch strategy earlier than committing contemporary flows to rising markets.

The conflict in the Center East has triggered a risk-off state of affairs in monetary markets. It stays to be seen how the conflict will evolve and influence crude and forex markets, Dr. VK Vijayakumar, Chief Funding Strategist, Geojit Investments mentioned, commenting on the disaster. In his view, FIIs are more likely to wait and watch how issues evolve earlier than making additional commitments in rising markets.

Echoing the same sentiment, Nachiketa Sawrikar, Fund Supervisor at Artha Bharat World Multiplier Fund mentioned he expects broad promoting of dangerous property throughout each the developed and rising markets towards the backdrop of a USA-Israel assault on Iran.

He mentioned buying and selling exercise seems more and more tilted towards US securities, with a parallel shift in flows towards bullion, signalling the chance of capital shifting out of rising markets. “We’d count on the ongoing rally in USA treasuries, oil, gold, and silver to increase,” the skilled added.

Sawrikar additionally sees a deeper influence of warfare on India, accelerating the overseas capital outflow due to its reliance on imported crude oil. “Larger crude oil costs might widen the present account deficit, stoking home inflation, stress the rupee,” he warned.

Vijayakumar mentioned FIIs shopping for on most days in February indicated a transparent shift in their funding technique in the direction of India. “There are variations in sectoral investments in February. FPIs had offered closely in IT shares attributable to the Anthropic shock and the persevering with weak spot in this section. However they had been consumers in monetary companies and capital items,” the Geojit analyst mentioned.

Whereas FPIs invested Rs 19,782 crores in the secondary markets, round Rs 2,832 crores was pumped-in the major market.On Friday, FII offered shares price Rs 7,536.36 crore, triggering an enormous sell-off. The benchmark indices Nifty and the BSE Sensex, ended with deep cuts on Friday amid promoting stress throughout the board. Auto, financials and FMCG had been main laggards whereas the IT sector noticed selective shopping for motion. In a risky session, the broader Nifty edged decrease by 317.90 factors, or 1.25%, to shut at 25,178.65, whereas the 30-share Sensex plunged by 961.42 factors, or 1.17%, to settle at 81,287.19.

FPI tendencies
February recorded inflows after a pointy January exodus of Rs 35,962 crore. FIIs are nonetheless internet sellers in 2026 at Rs 13,347 crore.

In 2025, the FII shopping for tendencies remained patchy, however the total pattern was bearish. They took out Rs 1,66,286 crore from Indian markets as commerce deal delay and premium valuations weighed on the sentiments.

FIIs had been internet sellers in December, offloading home shares price Rs 22,611 crore.

April–June interval of 2025 witnessed inflows totalling Rs 38,673 crore. In the meantime, large promoting to the tune of Rs 1,16,574 crore occurred throughout the January–March quarter.