FPIs pull out ₹44,166cr from Indian equities in October
What's the story
Foreign portfolio investors (FPIs) have pulled out ₹44,166 crore from Indian equities in October. The withdrawal takes the total outflows for the year to over ₹3 lakh crore. The trend is attributed to high crude oil prices, a strong US dollar and rising US bond yields, which are affecting investor sentiment. In September alone, FPIs withdrew ₹35,861 crore from Indian equities.
Market shifts
Global factors driving FPI outflows
The AI-driven rally in North Asian markets has also drawn more foreign investment.
Despite these outflows, Vedant Gupte, Co-Founder and CEO of investment platform Trackk, said this isn't a reflection of India's investment prospects but rather a global repositioning of capital.
He added that high crude prices, a strong dollar and US yields are pulling money back to safer ground while FPIs chase the AI rally in North Asia where valuations look cheaper.
Resilience
Domestic flows have absorbed the selling
Gupte further noted that domestic flows have absorbed the selling without impacting the market.
"We remain constructive on the medium-term outlook because domestic flows have absorbed this selling without the market cracking," he said.
His comments highlight a strong underlying resilience in India's financial markets despite heavy foreign outflows.
Market impact
Geojit Investments' view on foreign investor behavior
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said massive FPI selling is the main reason for the Indian market's underperformance this year.
He noted that the Nifty has given negative returns of 13.87% year-to-date in 2026.
From a foreign investor's perspective, withdrawing money from India makes sense as the risk-free return on 10-year US government bonds is above 5.2%.
Challenges
US bond yields impact on FPIs
Vijayakumar also pointed out that high US bond yields and crude oil prices have been major headwinds for the market in the last two months. He said, "So, as long as the US bond yields remain elevated, FPIs will continue to sell."