FPIs withdraw ₹7,443cr from equities in 1st week of September
What's the story
Foreign portfolio investors (FPIs) have turned net sellers in the first week of September, withdrawing ₹7,443 crore from Indian equities. The withdrawal comes after a two-month streak of investments by FPIs. In August and July, they had invested ₹30,919 crore and ₹20,200 crore, respectively. Prior to that, they were net sellers for four consecutive months from March to June.
Increased withdrawal
Outflow this year surpasses last year's total withdrawal
With the latest withdrawal, the total outflow by FPIs from Indian equities in 2026 has increased to ₹2.32 lakh crore.
This is higher than the total withdrawal of ₹1.66 lakh crore in 2025.
Rajkumar Rathi, Chief Investment Officer at YES Securities, attributed this trend to a rebound in crude oil prices and rising US bond yields, which have affected risk appetite for emerging markets like India.
Market adjustments
Foreign funds booking profits, rebalancing portfolios
Rathi also noted that India's premium equity valuations, especially in growth sectors and mid- and small-cap segments, are prompting foreign funds to book profits and rebalance their portfolios.
Despite the selling pressure in the secondary market, he said that foreign investor appetite for India's primary market has remained "structurally resilient."
This indicates a continued interest from FPIs in new issuances despite the current market volatility.
Future outlook
Global factors influencing foreign fund flows
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said global bond yields are likely to remain a key driver of FPI flows.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, added that Brent crude prices, evolving US-Iran geopolitical tensions, and upcoming US inflation data ahead of the Federal Reserve's mid-September policy meeting will also impact foreign fund flows.
This highlights how global economic factors can significantly influence domestic markets.