US-Iran Talks Collapse: FPIs Panic Sell Stakes as Middle East Tensions Trigger Indian Market Downturn
Foreign portfolio investors (FPIs) sharply reversed course, turning into net sellers of equity. This dramatic shift in sentiment followed the collapse of US-Iran talks, a development that saw US President Donald Trump ordering a navel blockade of the Strait of Hormuz.Despite the volatile global backdrop, domestic institutional investors (DIIs) provided a steady counterweight. The DIIs remained net buyers for the 31st consecutive day, acquiring shares worth ₹ 2,432 crore.
FPI Sell-Off Continues Amid Geopolitical Stress
The collapse of talks fueled significant selling pressure from the institutional layer. FPIs offloaded a total stake worth ₹ 1,983 crore in the recent trading session. This marks a stark contrast to their buying activities seen earlier in the year.This selling wave follows a period of escalating global risk. Last week alone, FPIs had offloaded a total stake worth ₹ 20,710 crore, a move directly linked to rising tensions amid the US-Iran conflict.
Examining the broader trend, FPIs posted a staggering ₹ 1.18 lakh crore in total selling in the last month, recording what was the highest ever monthly sell-off. Year-to-date, FPIs have net sold equities worth ₹ 1.77 lakh crore in 2026 so far.
Index Performance Reflects Global Caution
The broader Indian indices also reflected caution stemming from the geopolitical overhang. Indian equity benchmark, the NSE Nifty 50, wiped out most of the previous day's gains following the announcement of the US blockade.The 50-stock index declined nearly 1% to settle above 23,800. This follows a closing price of 24,050.60 registered on Friday.
Similarly, the BSE Sensex registered a significant downturn. The index closed over 700 points lower, representing a 0.97% decline, ending near 77,000.
DII Stability Offers Counterpoint to Volatility
While the large-scale selling by FPIs created significant downward pressure, DIIs maintained a strong bullish posture. The DIIs accumulated a stake worth ₹ 21,603 crore last week.This persistent buying activity suggests confidence from domestic capital despite the global headwinds. This stability highlights DIIs' continued commitment to the Indian equities market, contrasting with the international selling pressure.
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