Foreign Investors Pull Out Rs 48,056 Crore in October Amid Ongoing Market Sell-Off
Foreign Portfolio Investors (FPIs) have pulled out Rs 48,056 crore from Indian equities in October, driven by high crude oil prices, rising tensions in the Middle East, inflation worries, and disappointing corporate earnings. Despite these significant outflows, FPIs turned net buyers on two trading days during the week ending October 23. This follows a net withdrawal of Rs 35,861 crore in September, with FPIs having invested Rs 20,200 crore in July and Rs 29,631 crore in August, according to data from the Central Depository Services Ltd (CDSL).
Cumulative FPI outflows for 2026 have now reached Rs 3.08 lakh crore, surpassing the Rs 1.66 lakh crore withdrawn throughout 2025. Dheeraj Gaur, chief investment strategy officer at Choice Wealth, linked the selling to elevated crude oil prices, which have surged to around $114 per barrel, alongside weak corporate earnings and inflation concerns. The Rs 30,213-crore Jio Platforms IPO also temporarily absorbed market liquidity, adding to the pressure on Indian equities.
Easing Selling Pressure
The pace of FPI selling eased last week, attributed to a decline in US bond yields, which fell from 5.36% to around 5%. The rupee’s appreciation to 94.94 against the US dollar and attractive valuations among large-cap stocks also contributed to a shift in investor sentiment. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, noted these factors as key to the moderation in selling.
Vedant Gupte, Co-Founder and CEO of investment platform Trackk, suggested that the scale of outflows might not be as alarming as it appears, given that foreign ownership of Indian equities is at multi-year lows. He indicated that domestic investors now hold a larger market share. Gupte also mentioned that foreign investments through IPOs suggest that the selling could reflect a rotation out of existing holdings rather than a loss of confidence in India.
Market Sentiment Influencers
While the easing of FPI selling provides some relief, high crude oil prices and overall weakness in the equity market continue to pose risks. Pabitro Mukherjee, deputy vice president-research at Bajaj Broking, stated that market participants will closely monitor upcoming US Federal Reserve policy decisions and the Bank of Japan’s interest rate decision. Additionally, US GDP data will be a focal point for both domestic and global economic outlooks. Movements in Brent crude prices and developments in geopolitical conflicts, along with the ongoing corporate earnings season, will also impact investor sentiment.
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