FPIs turn net sellers, withdraw ₹7,443 cr from equities in early September

Foreign portfolio investors (FPIs) shifted from net buyers to net sellers in Indian equities at the start of September, withdrawing ₹7,443 crore. This outflow followed a surge in crude oil prices, a rise in US bond yields, and a strengthening US dollar, which dampened risk appetite. In August and July, FPIs had injected ₹30,919 crore and ₹20,200 crore, respectively.

Prior to this, they had remained net sellers for four consecutive months from March to June. As a result, the total outflow by FPIs from Indian equities in 2026 has risen to ₹2.32 lakh crore, surpassing the ₹1.66 lakh crore withdrawn in 2025. Rajkumar Rathi, Chief Investment Officer at YES Securities, attributed the recent selling to the rebound in crude oil prices, raising concerns over India's inflation and current account outlook.

He also noted that US bond yields strengthening and a firm dollar index had reduced foreign risk appetite for emerging markets. Additionally, India's premium equity valuations, especially in growth and mid- and small-cap sectors, prompted foreign funds to book profits and rebalance portfolios. However, Rathi highlighted that foreign investor appetite for India's primary market remained structurally resilient.

Globally, bond yields and evolving US-Iran geopolitical tensions, along with upcoming US inflation data, will influence foreign fund flows. Foreign investors also withdrew money from the debt market, with ₹377 crore exiting through the Fully Accessible Route (FAR) and ₹231 crore via the Voluntary Retention Route (VRR), while they invested ₹217 crore through the general route.