Rs 8,200 crore foreign outflows in 2 days of US-Iran ceasefire! Why FPIs are dumping Indian stocks
India is seen as geopolitically exposed, especially to an oil shock. There are no real AI plays, said Nithin Kamath of Zerodha.
- Apr 10, 2026,
- Updated Apr 10, 2026 11:53 AM IST
Even as the US and Iran announced a two-week temporary ceasefire, sending India equities soaring, foreign portfolio investors (FPIs) chose the development to dump Indian equities further, taking their April outflows to Rs 46,149 crore so far. FPIs sold a combined Rs 8,205 crore worth Indian stocks on Wednesday and Thursday, data that Business Today compiled from corporate database AceEquity suggested.
Nifty’s relative valuation premium has almost disappeared and is now at 3 per cent over the Bloomberg World Index. This premium stood at 11 per cent in September 2025. Analysts noted that while market valuations have eased following the US-Iran war led selloff, earnings growth is missing in India, with March quarter projections suggesting a muted show for India Inc. The recent episode of West Asia crisis also exposed India vulnerability to energy shocks, and the weakness in rupee has been a major cause for concern, as it eats into FPI returns.
"It appears that FPIs are determined to sell in India and move money to other markets like South Korea and Taiwan where the earnings growth prospects are much superior in 2026," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
Kotak Institutional Equities in its Q4 results preview suggested net profit growth of Sensex constituents at 3.1 per cent year-on-year (YoY). It expects Nifty50 firms to deliver a mere 2.6 per cent earnings growth in the fourth quarter.
Nithin Kamath of Zerodha noted that FPI interest has pretty much died out. "India is seen as geopolitically exposed, especially to an oil shock. There are no real AI plays. Valuations are rich. And the rupee situation doesn't help," he said in an X post.
Morgan Stanley said India's 12-month equity performance was almost the worst in history and relative valuations are at previous troughs. "India’s share in profits exceeds its index weight by the highest margin ever, and the Sensex is nearly the cheapest ever in gold terms. FPI positioning has only weakened over the past several months."
Emkay Global said it see the US-Iran ceasefire as the harbinger of a final peace settlement, bringing normalcy to energy prices in 1-2 months. FX recovery could be a catalyst for positive FPI inflows into India, reversing the aggressive selling of Rs $15.5 billion over the last six months, Emkay Global said.
Even as the US and Iran announced a two-week temporary ceasefire, sending India equities soaring, foreign portfolio investors (FPIs) chose the development to dump Indian equities further, taking their April outflows to Rs 46,149 crore so far. FPIs sold a combined Rs 8,205 crore worth Indian stocks on Wednesday and Thursday, data that Business Today compiled from corporate database AceEquity suggested.
Nifty’s relative valuation premium has almost disappeared and is now at 3 per cent over the Bloomberg World Index. This premium stood at 11 per cent in September 2025. Analysts noted that while market valuations have eased following the US-Iran war led selloff, earnings growth is missing in India, with March quarter projections suggesting a muted show for India Inc. The recent episode of West Asia crisis also exposed India vulnerability to energy shocks, and the weakness in rupee has been a major cause for concern, as it eats into FPI returns.
"It appears that FPIs are determined to sell in India and move money to other markets like South Korea and Taiwan where the earnings growth prospects are much superior in 2026," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
Kotak Institutional Equities in its Q4 results preview suggested net profit growth of Sensex constituents at 3.1 per cent year-on-year (YoY). It expects Nifty50 firms to deliver a mere 2.6 per cent earnings growth in the fourth quarter.
Nithin Kamath of Zerodha noted that FPI interest has pretty much died out. "India is seen as geopolitically exposed, especially to an oil shock. There are no real AI plays. Valuations are rich. And the rupee situation doesn't help," he said in an X post.
Morgan Stanley said India's 12-month equity performance was almost the worst in history and relative valuations are at previous troughs. "India’s share in profits exceeds its index weight by the highest margin ever, and the Sensex is nearly the cheapest ever in gold terms. FPI positioning has only weakened over the past several months."
Emkay Global said it see the US-Iran ceasefire as the harbinger of a final peace settlement, bringing normalcy to energy prices in 1-2 months. FX recovery could be a catalyst for positive FPI inflows into India, reversing the aggressive selling of Rs $15.5 billion over the last six months, Emkay Global said.