West Asia Crisis Triggers Indian Equity Outflows
Analysis based on 18 articles · First reported Mar 08, 2026 · Last updated Mar 08, 2026
The West Asia crisis, particularly the attack on Iran and the death of Ali Khamenei, triggered a global risk-off sentiment. This led to significant foreign investor outflows from Indian equities, rupee depreciation, and a surge in Brent Crude prices, negatively impacting emerging markets.
A major attack by the United States and Israel on Iran on February 28 resulted in the death of Iran's Supreme Leader, Ayatollah Ali Khamenei. This event escalated geopolitical tensions in West Asia, triggering a global risk-off sentiment among investors. Consequently, foreign portfolio investors pulled out approximately USD 2.3 billion from Indian equities over four trading sessions in early March. The crisis also pushed Brent Crude prices above USD 90 per barrel due to fears of disruptions in the Strait of Hormuz, further exacerbating market concerns. Other contributing factors to the outflows included the depreciation of the India===Indian rupee and elevated US Treasury yields, which drew capital towards safer assets. Experts anticipate that foreign investors will likely remain net sellers until there is greater clarity on the geopolitical situation and crude prices moderate.
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