Foreign investors withdraw ₹52,100cr from Indian equities in October
What's the story
Foreign Portfolio Investors (FPIs) have pulled out ₹52,100 crore from Indian equities so far this month. The withdrawal comes amid global economic challenges such as rising crude oil prices, increasing US bond yields, and a strengthening dollar. The latest outflow follows a net withdrawal of ₹35,861 crore in September.
Investment trends
Significant outflow in 2026
In July and August, FPIs had invested ₹20,200 crore and ₹29,631 crore in Indian equities, respectively. However, the trend seems to have reversed with the latest outflow.
The cumulative FPI outflow from Indian equities in 2026 has now reached a whopping ₹3.12 lakh crore, much higher than the total withdrawal of ₹1.66 lakh crore for all of 2025.
Market influences
Factors driving FPI outflow
Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributed the continued selling of Indian equities by FPIs to high US bond yields, a stronger dollar, and rising crude oil prices.
He also noted that persistent US inflation has led to expectations of a Federal Reserve rate hike, making US assets more appealing to foreign investors.
Market shift
Temporary reversal in FPI stance
On October 16, foreign investors turned marginal buyers. This temporary reversal is likely tactical rather than a structural change in investor sentiment.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said the slight dip in the US 10-year bond yield from above 5.3% to 5.08% and rupee's appreciation against the dollar were key factors behind this temporary change in FPI stance.
Market sectors
Sector-wise trends
Sector-wise, FPIs continued to sell shares in financial services and oil-related companies.
However, they remained buyers in consumer services such as digital platform companies, entertainment, restaurants, and healthcare services.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said the sharp moderation in FPI selling and reversal on Friday indicated stabilizing investor sentiment despite high crude oil prices posing a risk to recovery.