New Delhi: After two consecutive months of buying, foreign portfolio investors (FPIs) turned net sellers in September, pulling out Rs 35,860 crore from Indian equities amid global uncertainties, elevated US interest rates and high crude oil prices.
The selling continued into October, with foreign investors pulling out another Rs 9,232 crore from equities October 1, according to data from Central Depository Services Limited (CDSL).
The outflows came after FPIs invested Rs 20,200 crore in Indian equities in July and Rs 29,630 crore in August.
With the latest selling, FPIs have now withdrawn around Rs 2.7 lakh crore from Indian equities so far in 2026, significantly higher than the Rs 1.66 lakh crore outflow recorded during the entire 2025.
Rajesh Singla, Fund Manager & CEO at Alpha AMC, said FPIs were withdrawing from Indian equities largely due to external factors such as elevated crude prices amid Hormuz-related supply risks, a weak rupee, firm US bond yields, profit-booking following the July-August inflows and rotation towards AI-led North Asian markets.
“This is a global allocation story, not a domestic earnings one,” he said.
Singla said domestic SIP flows were helping absorb the impact of foreign selling, while SME and small-cap segments, which have relatively limited FPI ownership, remained comparatively insulated.
“Strategically, India’s growth case is intact; capital is rotating, not exiting,” he added.
Going ahead, analysts said FPI flows would be influenced by the ongoing Iran-US conflict and its impact on crude oil prices.
Elevated crude prices and higher US bond yields, with the US 10-year yield at around 5 per cent, could weigh on Indian equities and FPI flows.
However, the resilient Indian economy and expectations of stronger earnings growth remain positive factors, they said.
Foreign investors also extended their selling to the debt market during September. They withdrew Rs 10,431 crore through the Fully Accessible Route (FAR), Rs 5,049 crore via the Voluntary Retention Route (VRR) and Rs 5,246 crore through the general route.
