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War fears push FPIs to double India hedges to near record high

In two weeks since the outbreak of the West Asia war, large overseas funds nearly doubled protection against market fall at a cost of ₹20000 crore

Mar 13, 2026 &03211313202631; 11:21 UTC www.livemint.com Trending 4/5

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Negative for markets

Sentiment score: -65/100

High impact Short-term (days)

WHAT THIS MEANS

Foreign Portfolio Investors (FPIs) have doubled their hedging positions against Indian market downside in response to West Asia geopolitical tensions, spending approximately ₹20,000 crore on protective strategies. This defensive positioning reflects heightened risk aversion among overseas funds amid global uncertainty, potentially limiting upside momentum in Indian equities.

AI CONFIDENCE

75% High

SENTIMENT GAUGE

NEWS POWER SCORE

AFFECTED ASSETS

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FTSE MIB (Italy)

FTSEMIB.MIIndex

Expected to decline

FPI hedging activity signals defensive positioning and potential capital outflows from emerging markets

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IT→.MI

IT→.MIStock

High volatility expected

Indian equities face selling pressure as FPIs increase protective puts; IT sector particularly exposed to FPI flows

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Euro / US Dollar

EURUSDCurrency

Expected to rise

Risk-off sentiment typically strengthens USD as safe-haven currency amid geopolitical tensions

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Gold Futures

GC=FCommodity

Expected to rise

Gold benefits from increased hedging activity and geopolitical risk premium

PRICE HISTORY

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⚡ SUGGESTED ACTION

Consider reducing long positions in Indian equities and IT stocks in the near term; increase allocation to defensive sectors and safe-haven assets (gold, USD). Monitor FPI flows closely for signs of sustained capital outflows from emerging markets.

KEY SIGNALS

FPI hedging doubled to near-record levels₹20,000 crore deployed in protective strategiesWest Asia geopolitical tensions driving risk-off sentimentPotential FPI outflows from Indian marketsIncreased put option activity indicating downside protection

SECTORS INVOLVED

Information TechnologyFinancialsConsumer Discretionary

Analysis generated on Mar 16, 2026 at 14:45 UTC

Disclaimer: This analysis is generated by artificial intelligence for informational purposes only and does not constitute financial advice, investment recommendation, or solicitation. Original reporting by Livemint. Always conduct your own research and consult a qualified financial advisor before making investment decisions.

War fears push FPIs to double India hedges to near record high

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