Foreign portfolio investors have exited Indian equity markets with a net withdrawal of ₹52,100 crore during October, according to The Hindu BusinessLine. This latest movement follows a September outflow of ₹35,861 crore, indicating a sustained trend of capital leaving the country. The publication noted that these exits are occurring despite net inflows of ₹20,200 crore and ₹29,631 crore recorded in July and August, respectively, as reported by Central Depository Services Ltd data.
The cumulative outflow for 2026 now stands at ₹3.12 lakh crore, a figure significantly exceeding the ₹1.66 lakh crore withdrawn across the entirety of 2025. Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributed the selling pressure to a combination of rising US bond yields, a firming dollar, and high crude oil costs. He noted that persistent US inflation has increased the likelihood of a Federal Reserve rate hike, thereby enhancing the appeal of American assets for global investors. Additionally, Gaur pointed out that the artificial intelligence-led rally in North Asian markets is diverting funds away from Indian stocks.
A brief tactical reversal occurred on October 16, when foreign investors became marginal buyers. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, identified two key drivers for this temporary shift: a drop in the US 10-year bond yield to 5.08 per cent and a firmer rupee against the dollar. Sector-wise, sellers focused on financial services and oil-linked firms, while continuing to purchase consumer services, digital platforms, entertainment, and healthcare stocks.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, viewed the recent moderation in selling as a sign of stabilizing sentiment, though he warned that crude prices remain a risk. Looking ahead, market participants are monitoring Brent crude levels and US-Iran diplomatic developments. Domestically, focus will shift to second-quarter earnings for FY27. In the debt market, foreign investors were net sellers in September, withdrawing funds via the Fully Accessible Route and Voluntary Retention Route while investing through the general route.