FPI exodus puts Sensex in bear territory in dollar terms

The benchmark Sensex has declined 23% in dollar terms, as reflected by the BSE Dollex 30 index, which fell from its record high of 8,418.89 on September 26, 2024, to 6,482.11 on April 2, 2026. In comparison, in rupee terms, the Sensex has dropped 14.58% during the same period, from its all-time high of 85,736.12 to 73,319.55. Besides India, Philippines (down 25.35%) was the only equity markets was in bear phase during this period.

A bear market is typically defined as a prolonged period in which market prices fall by 20% or more, signaling widespread investor pessimism and expectations of an economic slowdown.

The Indian rupee has depreciated by 11.31% (or 946 paise), weakening from 83.64 on September 26, 2024, to 93.11 on April 2, 2026.

Currency Devaluation

The market’s trajectory has not been a steady decline but rather a volatile, roller-coaster ride. From its peak in September 2024, the BSE Dollex fell 18.53% until the first week of March 2025. It then rebounded 17.7% through the end of June 2025, before declining another 20% from the June 2025 peak to current levels.

Foreign portfolio investors (FPIs) have sold a substantial $47.1 billion (₹4.17 lakh crore) worth of equities during this period. In contrast, domestic institutional investors (DIIs) have invested a significant ₹12.53 lakh crore.

Rising US bond yields prompted many FPIs to exit riskier emerging markets such as India. The yield on the 10-year US Treasury rose from 3.75% in September 2024 to 4.79% in January 2025, though it has since eased to around 4.35%.

Global Headwinds

Uncertainty surrounding US President Donald Trump’s tariff policies has also weighed heavily on equity markets. More recently, the US–Israel–Iran conflict has intensified concerns, with Brent crude prices rising to around $110 per barrel, posing risks to inflation and overall economic growth.

Since the onset of the conflict, the Sensex has declined 11.65% in dollar terms. On a year-to-date basis, it has fallen 17%, making it the second-worst performer among major global equity indices. Indonesia’s Jakarta Composite has been the worst performer, declining 20.2% in dollar terms.