Foreign portfolio investors (FPIs) have pulled out ₹52,100 crore from Indian equities in October so far, marking a significant outflow amid global economic challenges. Elevated crude oil prices, higher US bond yields, and a stronger dollar have dampened investor sentiment, leading to this withdrawal. The latest outflow follows a net withdrawal of ₹35,861 crore in September, with FPIs having invested ₹20,200 crore in July and ₹29,631 crore in August, according to data from the Central Depository Services Ltd (CDSL).
The cumulative FPI outflow from Indian equities in 2026 has now reached ₹3.12 lakh crore, surpassing the ₹1.66 lakh crore withdrawn during the entire 2025. Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributed the continued selling to elevated US bond yields, a stronger dollar, and rising crude oil prices. He also noted that sticky US inflation has made US assets more attractive to foreign investors, while the AI-led rally in North Asian markets has drawn funds away from domestic equities.
However, foreign investors turned marginal buyers on October 16, a brief reversal likely to be tactical rather than indicative of a structural shift. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, pointed to a marginal decline in the US 10-year bond yield from above 5.3 per cent to 5.08 per cent and the rupee's strengthening against the dollar as significant factors behind this temporary change. Sectorally, FPIs continued to sell shares in financial services and oil-related companies but remained buyers in consumer services, including digital platform companies, entertainment, restaurants, and healthcare services.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, noted that the sharp moderation in FPI selling and the reversal in flows on Friday indicated stabilising investor sentiment, although elevated crude oil prices continued to pose a risk to any recovery. Investors will now track Brent crude prices, developments in US-Iran relations, and domestic attention will remain on second-quarter earnings for FY27. Additionally, foreign investors remained net sellers in the debt market in September, withdrawing ₹1,620 crore through the Fully Accessible Route (FAR) and ₹772 crore through the Voluntary Retention Route (VRR), while investing ₹3,387 crore through the general route.