FPIs withdraw Rs 52,100 crore from Indian equities in October amid global headwinds

Foreign portfolio investors (FPIs) pulled Rs 52,100 crore out of Indian equities in October, driven by global macroeconomic headwinds including elevated US bond yields, rising crude oil prices, and a strengthening dollar.

Data from the Central Depository Services Ltd (CDSL) shows that total foreign equity outflows in 2026 have now reached Rs 3.12 lakh crore. That figure substantially exceeds the Rs 1.66 lakh crore withdrawn across the entirety of 2025. The intense global sell-off follows a net withdrawal of Rs 35,861 crore in September, reversing the strong foreign inflows seen in July and August.

FPI flows into Indian equities

What is driving global capital away?

Market analysts attribute the continuous selling by foreign funds to external economic pressures. Elevated US 10-year bond yields alongside persistent US inflation have raised expectations of further Federal Reserve interest rate hikes, directing global capital back toward US assets. Furthermore, expensive crude oil has added inflationary pressure globally, while artificial intelligence-led rallies in North Asian stock markets have drawn foreign capital away from emerging markets.

Despite the sustained pressure from foreign funds, India's domestic economic fundamentals have kept markets stable. Domestic institutional investors and robust corporate balance sheets continue to absorb foreign selling pressure, ensuring national market stability.

Sector trends and stabilization signs

Foreign selling has not been uniform across all segments of the market. FPIs continued to offload shares in financial services and oil-related enterprises. However, foreign investors remained active buyers in consumer services, digital platform companies, healthcare, entertainment, and restaurants.

Foreign portfolio investors turned net buyers briefly on October 16 as the US 10-year bond yield eased slightly from over 5.3 per cent down to 5.08 per cent and the rupee showed strength against the dollar. Market watchers noted that investor sentiment appears to be stabilizing as attention shifts toward second-quarter earnings for FY27.

In the debt market, foreign investors saw mixed trends in September. FPIs pulled Rs 1,620 crore through the Fully Accessible Route and Rs 772 crore via the Voluntary Retention Route, while placing Rs 3,387 crore through the general route.