FPIs withdraw ₹48,056 crore from equities in Oct amid elevated oil prices

New Delhi: In October, Foreign Portfolio Investors (FPIs) withdrew an estimated Rs 48,056 crore from Indian equities, driven by rising crude oil prices, Middle East tensions, inflation concerns and uncertainty surrounding corporate earnings. This marks the largest monthly outflow since data tracking began. In September, FPIs had already withdrawn Rs 35,861 crore. Cumulative FPI outflows for 2026 have now surpassed Rs 3.08 lakh crore, a stark contrast to the Rs 1.66 lakh crore outflows seen in 2025.

FPIs had previously invested Rs 20,200 crore in July and Rs 29,631 crore in August, before the recent withdrawals. Dheeraj Gaur of Choice Wealth explained that the selling was prompted by crude oil prices nearing USD 114 per barrel, geopolitical tensions, weak earnings and domestic liquidity worries. However, the end-of-month relief was tempered by a Jio Platforms IPO, which temporarily absorbed market liquidity.

Despite the heavy monthly outflows, selling pressure eased during the final week of October. FPIs turned net buyers on two trading days, a turnaround attributed to declining US bond yields, a stronger rupee and appealing valuations for large-cap stocks.

In response to the substantial outflows, SBI Research has called for the scrapping of the tax on long-term capital gains (LTCG) in equities. Domestic investors, however, continue to provide support, helping to offset the impact of foreign selling. Anand K Rathi of MIRA Money noted that rising oil and logistics costs could adversely affect corporate earnings in the coming quarters.

While reduced FPI selling offers some relief, elevated oil prices remain a significant risk for Indian equities. Market participants will continue to monitor key global events, including upcoming policy decisions from the US Federal Reserve and Bank of Japan, as well as US GDP data, movements in Brent crude oil prices, geopolitical developments and corporate earnings.