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Foreign portfolio investors (FPIs) offloaded Indian equities worth 147.68 billion rupees ($1.77 billion) on a net basis in September, data from the National Securities Depository Ltd (NSDL) showed.

FPIs had bought Indian shares for six months in a row from March to August, with inflows aggregating to 1.69 trillion rupees.

FPIs sold shares in both halves of September as elevated U.S. yields, concerns over prolonged high interest rates in the United States and China economic recovery worries weighed on risk sentiment.

"FPIs will not invest new dollars in India when the rupee is weak. Also, bond yields at multi-year highs in the United States will trigger reallocation of foreign investments to U.S. debt markets from emerging markets like India," said Avinash Gorakshakar, head of research at Profitmart Securities.

Despite the FPI outflows, the benchmark Nifty 50 gained 2% in September and hit record highs during the month, aided by steady buying by domestic investors.

"The impact of FPIs in Indian markets has been challenged slightly in the last few years as markets are holding up firmly despite persistent foreign selling as domestic investors' base, especially through the mutual fund route, is increasing steadily," said Saurabh Jain, assistant vice president, research at SMC Global Securities.

Domestic institutional investors (DIIs) bought shares worth 203.13 billion rupees on a net basis in September, according to provisional data from the National Stock Exchange.

WHAT FPIs BOUGHT AND SOLD IN SEPTEMBER

FPIs turned net sellers in power, oil & gas and metals stocks.

The power sector, with outflows worth 97.31 billion rupees in September, had seen inflows worth 115.63 billion rupees in August on robust demand.

Metals and energy stocks also witnessed selling by FPIs due to concerns over global demand and economic recovery in China, the world's largest producer and consumer of commodities.

($1 = 83.2050 Indian rupees)