FPIs withdraw ₹20,974 crore from equities in Sep amid global uncertainty

Foreign Portfolio Investors (FPIs) have recently pulled Rs 20,974 crore from Indian equities in September, driven by global uncertainty, high US bond yields, expensive crude oil, and a weaker rupee. This marks the largest outflow so far in 2026, totaling Rs 2.45 lakh crore, compared to Rs 1.66 lakh crore during the entire 2025. The September withdrawal was recorded up to September 18, but FPIs have continued investing in the primary market.

Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributes the selling to higher US interest rates, elevated crude prices, and a weaker rupee. The US Federal Reserve has raised interest rates to 3.75-4.00 percent, reducing the yield gap between India and the US. Meanwhile, Brent crude prices remain above USD 100 per barrel due to geopolitical tensions, and the rupee fell 1.1 percent during the previous week, reaching a record low of 95.92-95.96 against the US dollar.

Vedant Gupte, Co-Founder and CEO of Trackk, suggests that the selling represents a broader "crude-and-dollar" trend affecting emerging markets. The future of FPI flows will depend significantly on the Iran-US conflict and its impact on crude prices. However, India's resilient economy and expectations of stronger earnings growth may provide some support. FPIs also withdrew Rs 10,296 crore from Indian debt markets through various channels.