Foreign institutional investors (FIIs) made a strong comeback in the Indian stock market in the month of February by investing Rs 22,615 crore, but the increasing Iran-Israel tension in the Middle East has raised questions on the sustainability of this positive trend. Market experts believe that due to increasing global uncertainty, foreign investors may adopt a cautious attitude at the moment.
Shopping seen in February, but market shocked
After heavy selling in January, FIIs became net buyers in February. He invested Rs 19,782 crore in the secondary market and Rs 2,832 crore in the primary market. However, on Friday, sudden selling of Rs 7,536 crore shocked the market, due to which both Sensex and Nifty registered a big fall.
Risk-off environment due to Middle East tensions
According to experts, the Iran-Israel conflict has created an environment of risk aversion in the global financial markets. Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, says that investors now want to see in which direction the conflict goes and how much impact it has on the crude oil and currency markets. In such an environment, foreign investors may prefer to wait before making new investments.
Lean towards safe investment options
According to fund manager Nachiketa Savarikar, amidst global tension, investors may move towards safe assets like American bonds, gold and silver. Due to this, we may see partial outflow of capital from emerging markets, especially countries like India.
Pressure on India if oil prices increase
Experts have warned that the rise in oil prices can become a challenge for India, because the country is dependent on crude oil imports. Due to this, current account deficit may increase, inflation may come under pressure and rupee may weaken. Although investment returns in February show positive signs, FIIs have remained overall net sellers so far in 2026. In such a situation, global developments will decide the direction of the Indian market in the coming weeks.