FPIs pull out Rs 34,843 cr from equities in Oct; turn net buyers last week
Amidst rising economic fears, foreign portfolio investors withdrew Rs 34,843 crore from Indian equities in October. Although they had made significant contributions in July and August, outflows continued through September. By late October, a turnaround occurred as foreign investors became net buyers, infusing approximately Rs 6,300 crore into the market. Support from domestic institutional…
Foreign portfolio investors (FPIs) withdrew Rs 34,843 crore from Indian equities in October, marking two consecutive months of substantial outflows driven by concerns over high crude oil prices, rising global interest rates, and mixed corporate earnings outlook. However, towards the end of the month, FPIs turned net buyers, injecting around Rs 6,300 crore between October 26-30. This represents a stark contrast to nearly Rs 2,700 crore in net outflows a week prior.
In September, FPIs withdrew Rs 35,861 crore before investing Rs 20,200 crore in July and Rs 29,631 crore in August. Cumulatively, FPI outflows from Indian equities in 2026 have hit Rs 2.95 lakh crore. While the recent inflows suggest a shift in near-term sentiment, market experts caution that a single week of buying does not guarantee a sustained reversal.
Anand K Rathi, co-founder of MIRA Money, attributes the recent improvement in FPI flows to a better outlook on global macroeconomic conditions, crude oil prices, and corporate earnings. However, he stresses that the sustainability of this development hinges on clearer signals regarding these factors. Domestic institutional investors have also played a crucial role in absorbing foreign selling, thus supporting market stability.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, points to the Federal Reserve's decision to hold interest rates, attractive valuations in Indian large-cap stocks, and growing domestic economic growth as potential catalysts for the change in investor sentiment. Additionally, he notes that the weakening global AI trade could be influencing portfolio allocation.
The improved FPI flows have also helped the Nifty regain the 23,000 mark. However, while some FPIs are selectively accumulating pharmaceutical and healthcare stocks, as well as certain digital platform companies, others continue to sell large-cap financial stocks. Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, views the reversal in FPI flows as encouraging for market sentiment, but warns that elevated crude prices and global risks could temper momentum.
Market participants will keep a close eye on the US mid-term elections, Brent crude prices, developments in the US-Iran and Russia-Ukraine conflicts, and upcoming quarterly earnings reports in the near term.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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