NEW DELHI, Sep 16 (TIWN): Foreign investors continued to reduce their exposure to Indian equities as global economic uncertainty and rising crude oil prices weighed on market sentiment.

Foreign portfolio investors sold approximately ?2,977.86 crore worth of Indian shares on Tuesday, September 15, according to market data. At the same time, domestic institutional investors remained buyers, purchasing shares worth around ?2,686.05 crore.

The contrasting investment patterns highlight the different behaviour of foreign and domestic investors during the current period of market volatility.

Indian benchmark indices declined sharply during Tuesday's trading session. The Nifty 50 fell 279.50 points, or 1.19%, to close at 23,118.60, while the Sensex declined 777.94 points, or 1.04%, to finish at 74,003.82. The Nifty ended at a five-month low.

One of the key concerns for foreign investors is the rise in crude oil prices. Brent crude moved above $100 a barrel and reached around $108, raising concerns about inflation and India's external balance.

Higher U.S. bond yields are another factor influencing international capital flows. Investors are closely monitoring the U.S. Federal Reserve as markets assess the possibility of a rate hike. Higher interest rates in the United States can affect the relative attractiveness of emerging-market assets.

The rupee has also weakened considerably. It closed at ?95.955 against the U.S. dollar on Tuesday, extending its decline for a seventh consecutive session.

Domestic institutional investors, however, have provided some support to the market. Their purchases of approximately ?2,686 crore on Tuesday helped partially offset the foreign selling.

The current market environment demonstrates the importance of both global and domestic capital flows for Indian equities. While foreign investors remain sensitive to oil prices, interest rates and currency movements, domestic institutional investors have increasingly become an important source of liquidity in the Indian market.

Investors are now watching the Federal Reserve's policy decision, crude oil movements and the direction of the rupee for signals about the next phase of market activity.