Foreign investors sold $1 billion in local stocks over the past eight sessions amid volatility in domestic and global markets amid heightened recession fears. This is the largest FII transaction in recent times.

Foreign investors temporarily sold shares of Rs 2,899.68 crore on September 23, according to the National Stock Exchange of India.

According to the Securities and Exchange Board of India (SEBI), they sold $686.13 million in shares between September 14 and September 22. They were five out of seven net sellers.

FIIs turned buyers in mid-July amid improving macroeconomic data from India. From mid-July to September 13, they bought $9.79 billion in local shares. Before that, they were net sellers, selling more than $34.43 billion in domestic equities between October 2021 and June 2022.

India’s main stock index has started falling over the past few sessions, tracking global markets in anticipation of further aggressive policy tightening by the central bank, which will hurt global growth.

Indian stocks erased all year-to-date gains and turned negative. In dollar terms, the Sensex and Nifty50 are both down more than 1% and 8% since the start of the year.

On September 26, the Indian rupee fell below the 81 mark against the US dollar, hitting a record low of 81.55. The Indian rupee has lost 8.5% of its value so far this year. Meanwhile, the US dollar index hit a 20-year high and has risen more than 17% this year.

Despite the severe sell-off, some analysts expect foreign investors to continue buying Indian stocks amid continued strong monthly data and falling crude prices.

The Fed raised interest rates by another 75 basis points on September 22 to fight inflation. The latest Fed statement includes higher rate forecasts for the end of 2023 and 2024 than previously forecast. All eyes are now on the RBI’s bi-monthly policy of September 28-30.