Indian households saw a sharp erosion of wealth in the March quarter of FY26 as equity markets faced heavy selling. Nearly ₹12.6 lakh crore was wiped out from household holdings after foreign investors pulled out amid global tensions and rising crude oil prices.
The Nifty index fell more than 10 percent, marking one of the most volatile quarters in recent years. The selloff was triggered by the Iran conflict, surging oil prices, and foreign portfolio investor outflows. Global capital also shifted toward semiconductor and AI‑linked markets in Taiwan and South Korea.
Household equity holdings dropped 13 percent quarter‑on‑quarter to ₹76.5 lakh crore. Despite this setback, cumulative household wealth since April 2020 remains higher by ₹44 lakh crore, showing long‑term gains. Foreign investor ownership fell to a 17‑year low of 15.8 percent, with net outflows of $19.6 billion in FY26.
Domestic mutual funds continued to grow, reaching a record 11.4 percent ownership, marking the eleventh straight quarter of expansion. Direct household ownership slipped to 9.1 percent, the lowest in five years, as investors increasingly preferred mutual funds and systematic investment plans.
Analysts noted that high oil prices raised concerns about inflation, current account deficit, and rupee stability. Public sector stocks outperformed private peers due to government spending and infrastructure themes.
This shift highlights the maturity of retail investors who now rely more on mutual funds than direct stock picking.
