Winning Bizness Desk
Mumbai.Foreign portfolio investors (FPIs) have continued selling Indian equities, withdrawing ₹44,166 crore from the stock market in October so far. Their net outflows in 2026 have crossed ₹3.04 lakh crore, reflecting sustained pressure on domestic markets.
The main factors behind the withdrawals are:
- Higher crude oil prices amid Gulf supply risks.
- A strengthening US dollar.
- Rising yields on 10-year US government bonds.
- A rally in artificial intelligence (AI) stocks in North Asian markets, attracting foreign capital.
October selling follows September’s heavy outflows
According to National Securities Depository Ltd (NSDL) data, FPIs sold Indian shares worth ₹35,861 crore in September, following investments of ₹20,200 crore in July and ₹29,631 crore in August. The cumulative outflow of more than ₹3.04 lakh crore in 2026 is nearly double the ₹1.66 lakh crore withdrawn during the whole of 2025.
Global repositioning rather than India-specific concerns
Vedant Gupte, co-founder and chief executive of investment platform Trackk, said the selling should be viewed as a global portfolio repositioning exercise rather than evidence of deteriorating investment conditions in India.
He said crude oil prices remained elevated because of Gulf supply risks, while a stronger dollar and higher US bond yields were drawing capital towards safer investment options. FPIs were also chasing the AI rally in North Asian markets, where valuations appeared relatively cheaper.
Gupte added that domestic institutional investors (DIIs) and retail investors had absorbed much of the selling pressure. This indicated that the underlying strength of the Indian market was better than the outflow figures suggested.
Nifty falls 13.87% amid persistent foreign selling
VK Vijayakumar, chief investment strategist at Geojit Investments Ltd, said FPI selling was the main reason for the Indian market’s weak performance this year. The Nifty has delivered a negative return of 13.87% in 2026 so far. Vijayakumar said the risk-free return on 10-year US government bonds remained above 5.2%, making withdrawals from Indian equities unsurprising for foreign investors.
He said selling could continue as long as US bond yields remained elevated. The trend could change when Indian equities became attractively valued.
Foreign investors also withdraw from debt markets
FPIs also sold debt securities in September through different investment routes:
- ₹1,921 crore withdrawn through the Fully Accessible Route (FAR).
- ₹233 crore withdrawn through the Voluntary Retention Route (VRR).
- ₹4,729 crore invested through the general route.
Understanding FPI and the Fully Accessible Route
Foreign Portfolio Investors (FPIs):Overseas investors who put money into a country's shares, bonds and other financial assets to earn returns without directly managing the companies concerned.
Fully Accessible Route (FAR):Introduced by the Reserve Bank of India (RBI), it allows foreign investors to invest in or sell specified Indian government securities without investment limits under the route.
