FPIs withdraw Rs 34,843 crore from Indian stocks; second straight month of selling spree

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Foreign portfolio investors (FPIs) withdrew Rs 34,843 crore from Indian equities in October, marking the second consecutive month of substantial outflows amid concerns over high crude oil prices, global interest rates and the outlook for corporate earnings.However, foreign investors turned net buyers towards the end of the month, purchasing equities worth around Rs 6,300 crore between October 26 and 30.This followed net withdrawals of nearly Rs 2,700 crore in the week ended October 23, according to data from the Central Depository Services Ltd (CDSL).The latest buying indicates an improvement in near-term investor sentiment, although market experts cautioned that a single week of positive flows does not necessarily signal a sustained reversal.

FPI outflows from Indian equities reach Rs 2.95 lakh crore in 2026

Foreign investors had withdrawn Rs 35,861 crore from Indian equities in September. Before that, they invested Rs 20,200 crore in July and Rs 29,631 crore in August.With October's withdrawals, cumulative FPI outflows from Indian equities in 2026 have reached Rs 2.95 lakh crore.Anand K Rathi, co-founder of MIRA Money, said foreign selling remained significant through October, reflecting concerns over elevated crude prices, global interest rates and corporate earnings prospects.

“Higher crude prices pose risks to India's inflation and corporate margins, and attractive yields in the US continue to influence global capital allocation,” he said.Rathi added that the sustainability of the recent improvement in foreign flows would depend on greater clarity over global macroeconomic conditions, crude prices and the earnings outlook. He also pointed to the role of domestic institutional investors in absorbing foreign selling and supporting market stability.

Fed decision, valuations among factors behind late-month buying

FPIs were net buyers in three of the four trading sessions ending October 30 in the cash market, suggesting a possible improvement in their outlook towards Indian equities.VK Vijayakumar, chief investment strategist at Geojit Investments, said the US Federal Reserve's decision to keep interest rates unchanged, attractive valuations in Indian large-cap stocks and signs of sustained domestic economic growth could have contributed to the shift in sentiment.The weakening of the global artificial intelligence trade could also be influencing portfolio allocations, he added.The improvement in foreign investment flows helped the Nifty reclaim the 23,000 mark.Vijayakumar said that while foreign investors continued to sell large-cap financial stocks, they were selectively accumulating pharmaceutical and healthcare shares, along with stocks of certain digital platform companies.Pabitro Mukherjee, deputy vice-president for research at Bajaj Broking, said the reversal in FPI flows was encouraging for market sentiment. However, elevated crude prices and global event-related risks could restrict the momentum.Market participants will closely watch the outcome of the US midterm elections in the coming week, along with movements in Brent crude prices, developments in the US-Iran and Russia-Ukraine conflicts, and quarterly corporate earnings announcements.These factors are expected to remain important drivers of foreign investment flows and broader market sentiment in the near term.