FIIs withdraw ₹1.75L crore from Indian markets in 2026
What's the story
Foreign institutional investors (FIIs) have continued to pull out money from Indian markets in April 2026, with net outflows of ₹43,967 crore so far. This has taken the total withdrawal this year to a staggering ₹1.75 lakh crore. The trend continued for the 10th consecutive month as geopolitical tensions and lack of clear sectoral leadership weighed on institutional flows, according to Bajaj Broking.
Market impact
FIIs net sellers since September 2024
The massive selling by FIIs has led to sharp declines in domestic indices. The Nifty 50 index fell 275.10 points or 1.14% to close at 23,897.95, while the Sensex plummeted 999.79 points or 1.29% to end at 76,664.21 on Friday alone. Despite improving global cues, FIIs have remained net sellers in Indian markets since September 2024, with over $45 billion pulled out during this period and another $5 billion sold this month alone.
Market outlook
Global developments to drive institutional activity
Going forward, global developments are expected to drive institutional activity in the Indian market. The United States Federal Open Market Committee (FOMC) meeting on April 28 and 29 will decide policy moves amid ongoing tensions in the region. The outcomes of this meeting will be declared on April 29. These global news flows are likely to have an impact on equity markets worldwide and institutional activity in India.
Market dynamics
India's reduced appeal in global allocation strategies
N. Aruna Giri, CEO of TrustLine Holdings, said that the divergence in FII flows highlights India's reduced appeal in global allocation strategies as its MSCI weight has dropped sharply. He explained that "FIIs are predominantly large-cap, top-down investors," and their participation hinges on clear sectoral leadership—which is currently absent with IT facing derating and private banks showing muted growth.
Market appeal
Domestic investors favored over global flows
Giri added that "in the absence of a clear index driver, India's relative attractiveness diminishes," especially in a market expected to remain sideways and stock-specific. This typically favors domestic investors over the global flows. From an FII standpoint, a meaningful return will likely depend on two key triggers: "a clear earnings acceleration cycle" and "supportive currency trends."