US Iran War: Indian equities extended their sell-off on Monday, September 28, 2026, with the Nifty 50 slipping below the 22,900 mark and the Sensex tumbling more than 900 points in morning trade, as renewed US-Iran tensions triggered a fresh wave of foreign investor selling.
The Numbers Behind The Sell-Off
Foreign Portfolio Investors (FPIs) sold shares worth Rs 5,353.22 crore on September 28 alone, even as Domestic Institutional Investors (DIIs) stepped in as net buyers to the tune of Rs 5,189.02 crore, cushioning some of the blow. FPIs have now sold a net Rs 29,255.58 crore in Indian equities in September so far, reversing the momentum from July and August, when foreign investors had turned net buyers with inflows of Rs 6,731.97 crore and Rs 17,366 crore respectively.
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What Triggered The Latest Slide
The immediate trigger was President Donald Trump‘s rejection of an Iranian proposal linked to reopening the Strait of Hormuz, deepening uncertainty around a conflict that has run for nearly seven months. The development pushed crude oil prices higher and raised fresh concerns over prolonged supply disruptions, a critical worry for oil-importing India.
A Pattern That’s Repeated All Year
This is not the first time West Asia tensions have rattled Dalal Street in 2026. When the conflict first erupted in late February, FPIs pulled out roughly Rs 52,704 crore in the first fortnight of March alone, contributing to a record monthly outflow of over Rs 1.14 lakh crore, the worst on record, as Brent crude surged past $100 a barrel and the rupee weakened past the 92-per-dollar mark.
Why India Feels The Pinch More
US Iran War: Market experts note that India’s relative valuation premium over global benchmarks has narrowed sharply this year, while earnings growth has remained comparatively muted, making Indian equities less attractive next to markets like South Korea and Taiwan.
