Foreign investors pull sizable funds from Indian stocks amid oil price surge
Foreign portfolio investors have been net sellers of Indian equities this October, driven by high crude prices and geopolitical tensions, though selling eased later in the month.
During October, foreign portfolio investors have been net sellers of Indian stocks, pulling back significant capital amid soaring crude oil prices that have risen to around USD 114 per barrel, ongoing Middle East tensions, and concerns over inflation and corporate earnings. This follows September's net withdrawals of more than 35 000 crore rupees. While the cumulative outflows for 2026 now exceed those of the entire previous year, the pace of selling slowed in the week ending 23 October, with FPIs posting net purchases on two trading days.
Analysts attribute the moderation to a dip in US 10-year bond yields, a rupee appreciation to roughly 94.94 per dollar, and relatively attractive large-cap valuations. Domestic institutional inflows and systematic investment plans have helped cushion the market, and some foreign investors are rotating out of existing holdings rather than abandoning confidence in India. Nonetheless, foreign investors remain net sellers in the Indian debt market, and future sentiment will hinge on US Federal Reserve decisions, Japanese rate policy, and global oil price movements.
Why it matters
Large foreign outflows can pressure Indian markets and affect investor confidence.
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