FPIs withdraw ₹48,056 crore from Indian equities in October so far

Foreign portfolio investors eased their selling last week and bought Indian equities on two trading days, but their net withdrawals in October have still reached ₹48,056 crore.

The outflows have come amid elevated crude oil prices, escalating West Asia tensions, concerns over inflation and weak corporate earnings.

The latest withdrawal follows net selling of ₹35,861 crore by FPIs in September.

Outflows exceed 2025 total

Data from the Central Depository Services Ltd (CDSL) showed that FPIs had invested ₹20,200 crore in Indian equities in July and ₹29,631 crore in August.

The subsequent selling has taken cumulative FPI outflows from Indian equities in 2026 to ₹3.08 lakh crore.

That figure is substantially higher than the ₹1.66 lakh crore withdrawn during the entire year 2025, according to the data.

Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributed the selling to several pressures facing global and Indian markets.

He said crude oil prices had surged to around $114 per barrel amid West Asia tensions.

Gaur also cited weak corporate earnings, inflation concerns and uncertainty over domestic liquidity conditions as factors behind the withdrawals.

The ₹30,213-crore Jio Platforms IPO temporarily absorbed market liquidity, while global portfolio reallocations added to the pressure on Indian equities, he said.

High oil prices weigh on outlook

Anand K. Rathi, Co-Founder of MIRA Money, said FPIs had continued to withdraw funds because crude oil prices remained persistently high and concerns over the earnings outlook continued.

He said second-quarter results had been relatively strong.

However, higher oil and logistics costs could weigh on corporate earnings growth in the coming quarters, Rathi said.

Elevated U.S. interest rates have also continued to make American assets attractive, adding to the pressure on Indian equities.

At the same time, steady inflows from domestic institutional investors and systematic investment plans (SIPs) have helped cushion the selling pressure, Rathi added.

The contrast between foreign selling and domestic buying has limited the impact of FPI withdrawals on the market, according to the cited market commentary.

Selling slows in the week ended October 23

FPIs significantly reduced their selling in the week ended October 23 and turned net buyers on two days.

V. K. Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd., attributed the moderation to a decline in U.S. bond yields.

The 10-year yield eased from 5.36% to around 5%, while the rupee appreciated to 94.94 against the U.S. dollar.

Vijayakumar also pointed to attractive valuations, particularly among large-cap stocks, as a reason for the change in foreign investor activity.

Vedant Gupte, Co-Founder and CEO of investment platform Trackk, said the scale of the outflows appeared less alarming than it might suggest.

He pointed out that foreign ownership of Indian equities was already at multi-year lows, while domestic investors accounted for a larger share of the market.

Gupte added that foreign investments through IPOs indicated that the selling could represent a rotation out of existing holdings rather than a loss of confidence in India.

Debt market also sees withdrawals

Foreign investors remained net sellers in the Indian debt market in October so far.

They withdrew ₹3,858 crore through the Fully Accessible Route (FAR) and ₹1,332 crore through the Voluntary Retention Route (VRR).

They invested ₹3,737 crore through the general route during the same period.

The debt-market flows show that foreign investor withdrawals have extended beyond equities, although the routes recorded different levels of activity.

Global policy decisions in focus

The moderation in equity selling offers some relief, but elevated crude oil prices and broad-based weakness in the equity market continue to pose downside risks.

Market participants will closely track the U.S. Federal Reserve's Federal Open Market Committee (FOMC) policy decision and the Bank of Japan's interest rate decision in the coming week, said Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking.

U.S. gross domestic product (GDP) data will also be a key focus on the domestic and global macroeconomic front.

Movements in Brent crude prices, developments in the U.S.-Iran and Russia-Ukraine conflicts, and the ongoing corporate earnings season will also influence investor sentiment, Mukherjee said.

Source: The Hindu