What happened
Foreign portfolio investors (FPIs) have pulled ₹48,056 crore out of Indian equities in October so far, according to data from Central Depository Services Ltd (CDSL). Reports in the Economic Times and The Hindu attribute the selling to elevated crude oil prices, Middle East tensions, inflation concerns and weak corporate earnings.
FPIs are overseas funds and institutions that buy Indian shares and bonds without taking control of companies. You can read more in our explainer on FPIs.
The October figure follows net withdrawals of ₹35,861 crore in September. In July and August, FPIs had been net buyers, investing ₹20,200 crore and ₹29,631 crore respectively.
Cumulative FPI outflows from Indian equities in 2026 have now reached ₹3.08 lakh crore. That is well above the ₹1.66 lakh crore withdrawn in the whole of 2025.
There was one sign of relief. In the week ended 23 October, FPIs sharply reduced their selling and were net buyers on two trading days.
What it means for you
Heavy foreign selling can add pressure to share prices and the rupee, but money from Indian investors has softened the blow. Anand K Rathi of MIRA Money pointed to regular buying by domestic institutions and monthly contributions to systematic investment plans as a cushion. If you invest through SIPs, your monthly contributions are part of that support.
Analysts quoted in the reports gave different readings of the outflows:
- Dheeraj Gaur of Choice Wealth said selling was driven by crude oil, which rose to around $114 a barrel, along with weak earnings, inflation concerns and uncertainty over domestic liquidity. He also said the ₹30,213 crore Jio Platforms IPO temporarily absorbed market liquidity.
- Rathi said second-quarter results have been relatively strong, but higher oil and logistics costs could weigh on earnings growth in coming quarters. He added that elevated US interest rates keep American assets attractive.
- V K Vijayakumar of Geojit Investments attributed the easing in selling to a fall in US 10-year bond yields from 5.36% to around 5%, the rupee strengthening to 94.94 against the US dollar, and attractive valuations among large-cap stocks.
- Vedant Gupte of Trackk offered a calmer view. In his reading, the numbers look less worrying because overseas investors already held their smallest share of Indian equities in several years, while Indian investors now make up more of the market. He also noted that foreign money is still coming in through IPOs, which in his view suggests investors are shifting between holdings and have not lost faith in India.
Background
Foreign investors were also net sellers of Indian bonds. Reports put the net outflow at about ₹3,858 crore via the FAR channel, which lets overseas investors buy eligible government bonds without limits, and about ₹1,332 crore via the VRR channel, which requires investors to keep a minimum share invested. A separate general route saw net buying of ₹3,737 crore. The Economic Times ties these debt figures to September, while The Hindu says October so far, so the period is unclear.
What to watch next
Pabitro Mukherjee of Bajaj Broking said markets will track the US Federal Reserve policy decision and the Bank of Japan’s rate decision in the coming week. US GDP data, Brent crude movements, the US-Iran and Russia-Ukraine conflicts and the ongoing earnings season will also shape sentiment. Reports say elevated crude prices and broad weakness in equities remain downside risks.
