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Sensex falls more than 11,000 points from record high amid FPI outflows
The slide follows the February 2026 US-Iran war and Strait of Hormuz closure, which disrupted global USD flows and intensified FPI and FII selling in India.
India’s benchmark Sensex has fallen more than 11,000 points from its record high of 86,159 set on 1 December 2025, trading below 75,000 as selling pressure persists across Indian markets, according to LiveMint Markets.
LiveMint Markets cites US-Iran war-related uncertainty as a key driver, saying the outbreak on 28 February 2026 and the closure of the Strait of Hormuz contributed to broader economic stress, including inflation pressure, fiscal deficit strain, and a decline in US dollar reserves worldwide. With rapid USD outflows, the outlet says portfolio investment was hit, prompting ongoing selling by FPIs and FIIs.
The outlet also points to shifting investor sentiment, noting that FIIs previously sold in India and bought in South Korea amid an AI-driven theme, but are now less convinced about Indian stocks as an AI slowdown narrative gains traction. It adds that despite India’s GDP in Q1FY27 coming in at 7.8%, FIIs and FPIs are still waiting for a trend reversal in their trade pattern.
According to LiveMint Markets, analysts expect further moves around US Treasury yields, with the market estimating that higher yields could worsen the US debt outlook and push the US administration to cap or fix bond yields. It also quotes Basav Capital founder Sandeep Pandey, who said the reported NRI dollar inflows through FCNR bonds are viewed as a short-term solution and that foreign investors are waiting for reforms that make portfolio investment more attractive.
Latest closeSensex 74,828.25 ▼0.0%