Foreign selling in Indian equities surged in the first half of March, led by ​financials, marking the heaviest fortnightly selling in 17 months and dragging the Nifty ‌50 to its worst fortnight since the COVID-19-led rout in March 2020. Foreign portfolio investors offloaded stocks worth 527.04 billion rupees ($5.65 billion), data from the National Securities Depository showed on Thursday, with financials - the most foreign-owned major ​Indian sector - accounting for 60% of the total outflows. The sharp withdrawals came despite early ​signs of an earnings recovery in the December quarter as the U.S.-Israeli war on ⁠Iran sent crude prices surging, pushed the rupee to a record low and rekindled concerns over ​energy supply, inflation and India’s growth outlook. Sustained selling dragged the Nifty 50 down 8.1% for the first ​half of this month, with financials and banksplunging 9.8% and 11.2%, respectively. Indian shares log steepest fall in nearly 2 years as HDFC Bank, oil spike weigh The Nifty 50 and Sensex have dropped about 10% each so far this year, and confirmed a technical correction last week. “For global investors, the worry is that higher ​energy prices could revive inflation, much as they did after the Russia-Ukraine war began in ​2022,” said Ross Maxwell, global strategy operations lead at VT Markets, adding that this could keep monetary ‌policy ⁠tighter for longer and weigh on energy-importing economies such as India. Analysts said the intense pullback in financials had made valuations more appealing for domestic investors. “Heavy FPI selling in ​financials has made them ​attractive and investable,” ⁠said VK Vijayakumar, chief investment strategist at Geojit Investments. However, March outflows from financials could accelerate and hit a record high, with governance worries around HDFC ​Bank adding to the pressure, according to two analysts. HDFC Bank the heaviest-weighted ​stock in ⁠the benchmarks, fell about 4.3% on Thursday after the abrupt exit of its part-time Chairman Atanu Chakraborty, who cited differences over “values and ethics”.