FIIs have already withdrawn ₹5,300cr from Indian market this year
What's the story
Foreign institutional investors (FIIs) have withdrawn ₹5,349 crore from Indian markets in the first two trading sessions of 2026. The data comes from the National Securities Depository Limited (NSDL). This marks a continuation of a nine-week-long selling spree by FIIs across all asset classes. On January 1, FIIs recorded a net outflow of ₹2,167 crore and another ₹3,182 crore on January 2.
Market impact
Equity segment witnesses significant FII selling
In the equity segment itself, FIIs sold ₹4,588 crore via stock exchanges on January 1 and ₹3,041 crore on January 2. However, primary market investments of ₹20 crore provided some relief to the net equity outflow which stood at ₹7,608 crore for these two sessions. The continued selling pressure comes after a tough December when FIIs had offloaded equities worth ₹30,333 crore through exchanges.
Historical context
2025 records highest FII selling in India
The total FII selling via exchanges in the calendar year 2025 reached a whopping ₹2.40 lakh crore. Primary market investments of ₹73,909 crore offered some cushion but the net outflow for 2025 was still at ₹1.66 lakh crore. Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said "the year 2025 closed with record FII selling in India," and blamed relatively elevated valuations and 'AI trade' as key factors driving this trend.
Future prospects
Market outlook for 2026 remains cautiously optimistic
Market experts are cautiously optimistic about 2026. "The year 2026 is likely to witness some changes in the FII strategy," said Vijayakumar. He added that significant improvement in India's fundamentals are likely to attract net FII inflows this year. Prateek Agrawal, MD & CEO of Motilal Oswal AMC, echoed similar sentiments saying "as the currency stabilizes at new level, flows could improve gradually."