Foreign investors pull billions from Indian stocks as global capital shifts

Foreign portfolio investors withdrew ₹44,166 crore from Indian equities during October, raising cumulative outflows for 2026 to over ₹3 lakh crore. This follows a September net exit of ₹35,861 crore and contrasts with earlier months when FPIs added ₹20,200 crore in July and ₹29,631 crore in August. Market commentators say the withdrawals reflect a global reallocation driven by elevated crude prices, a firmer US dollar, higher US Treasury yields and the appeal of AI-focused rallies in North Asian markets, rather than a specific weakness in India.

Domestic flows have so far absorbed the selling, preventing a sharp market decline. The Nifty index has posted a 13.87% loss year-to-date, largely blamed on the foreign outflow pressure. Analysts expect the trend to continue while US yields stay high, with a potential reversal only if Indian valuations become more attractive.