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Friday, 16 October
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EconomyMarkets

Foreign investors pull a record ₹3.08 lakh crore from Indian shares in 2026

Selling in the first nine months is nearly double last year's full-year total, as high US yields, the AI trade abroad, costly oil and a weak rupee draw money away.

From the editorial desk · MumbaiPublished
BSE building on Dalal Street, Mumbai
BSE building on Dalal Street, MumbaiPhoto: Rangan Datta Wiki / Wikimedia Commons, CC BY-SA 4.0

Key points

  1. Foreign portfolio investors sold a record ₹3.08 lakh crore of Indian equities in the first nine months of 2026.
  2. That compares with ₹1.66 lakh crore withdrawn in the whole of 2025.
  3. They have sold another ₹47,417 crore in October up to 12 October.

Foreign investors have pulled more money out of Indian shares this year than in any year before, and the selling has not let up in October.

Foreign portfolio investors (FPIs) sold a net ₹3.08 lakh crore of Indian equities in the first nine months of 2026, nearly double the ₹1.66 lakh crore they withdrew in the whole of 2025. Counting only the secondary market, net sales up to 12 October reached ₹3.64 lakh crore, partly offset by ₹56,485 crore of net buying in share sales and IPOs. FPIs sold ₹35,861 crore in September and another ₹47,417 crore in the first 12 days of October.

Domestic institutions have absorbed much of the selling, investing a net ₹6.83 lakh crore this year. Even so, the Sensex was down about 15.6% for the year before Tuesday’s rally.

Why the money is leaving

Market analysts point to US government bond yields above 5.2%, the global rush into artificial intelligence and chip stocks in the US, Taiwan and South Korea, oil prices driven up by the war in West Asia, and a weak rupee that eats into dollar returns.

“So long as the US bond yields remain elevated, FPIs will continue to sell,” said V K Vijayakumar, chief investment strategist at Geojit Investments.

Jignesh Desai, CEO of institutional equities at Centrum Broking, said “the AI trade matters most, since that is where the money leaving India has gone”. He added: “Strong SIP flows have also made exiting easy, because FPIs can sell in size and the market holds up.”

Speaking at the Bloomberg New Economy Forum on Tuesday, Kotak Mahindra Bank founder Uday Kotak said a small group of global stocks was attracting most portfolio flows, and India should treat this as “an important signal” to become more competitive.