Why have FIIs been selling so aggressively in the month of March?

March 2020 may end up being a record of sorts in terms of FPI selling. FIIs have already taken out Rs.108,697 crore from Indian markets in the first 3 weeks of March 2020. They have withdrawn Rs.56,248 crore from equities and Rs.52,449 crore from debt in the first 3 months. This outflow is much higher than the peak of the Lehman crisis. The spread of the Coronavirus has led to a general risk-off sentiment among global investors leading to heavy selling across emerging markets. The debt selling is more on the back of concerns that the currency could weaken from current levels. Bond spreads could also narrow.