NEW DELHI:
Foreign portfolio investors (FPIs) have withdrawn around Rs 52,100 crore from Indian equities in October so far, with elevated crude oil prices, higher US bond yields and a stronger dollar weighing on investor sentiment.
The latest outflow, recorded up to the middle of October, exceeds the net withdrawal of Rs 35,861 crore reported for September. With the latest selling, cumulative FPI withdrawals from Indian equities during 2026 have crossed Rs 3.1 lakh crore, according to data cited from the Central Depository Services (India).
Market analysts have attributed the selling pressure to a combination of global and domestic concerns. Higher US bond yields can make American assets more attractive to international investors, while a stronger dollar can increase the cost of holding assets in emerging markets. Rising crude oil prices have added to concerns about India’s import bill, inflation and the pressure on the rupee.
The uncertainty surrounding global monetary policy has also influenced investment decisions. Expectations of further interest-rate increases in the United States could encourage investors to shift funds towards dollar-denominated assets. At the same time, foreign investors are assessing the outlook for Indian corporate earnings and the relative attractiveness of other markets.
Despite the substantial foreign outflows, Indian equities have shown resilience at points during the month, supported in part by domestic investors. The temporary recovery in share prices suggests that domestic institutional investors and retail participation continue to play an important role in absorbing foreign selling.
However, sustained FPI withdrawals can affect market liquidity, influence share prices and put pressure on the domestic currency. Market participants are expected to monitor crude oil movements, US bond yields, the dollar and further signals from central banks for indications of the direction of foreign investment flows.
Analysts caution that short-term changes in foreign investor activity do not necessarily signal a permanent shift in sentiment. The scale and duration of the outflows will depend on global risk appetite, currency movements and the relative performance of Indian markets.