FPIs Turn Net Sellers Again, Withdraw ₹7,443 Crore from Indian Equities in First Week of September

Foreign portfolio investors (FPIs) returned to selling Indian equities in the first week of September, withdrawing ₹7,443 crore after remaining net buyers for two consecutive months, according to market data.

The latest outflow came amid concerns over rising crude oil prices, increasing US bond yields and a firm US dollar, which reduced investor appetite for riskier assets, including emerging markets such as India.

FPIs had invested ₹30,919 crore in Indian equities in August and ₹20,200 crore in July, marking a reversal after four consecutive months of selling between March and June.

With the September outflow, foreign investors’ total withdrawal from Indian equities in 2026 has increased to ₹2.32 lakh crore so far. This is higher than the ₹1.66 lakh crore withdrawn during the entire calendar year 2025.

Why FPIs Are Selling Again

Global factors have played a key role in shaping foreign investor sentiment towards Indian markets. A rise in US bond yields generally makes dollar-denominated assets more attractive, leading investors to reassess allocations towards emerging markets.A stronger dollar can also impact foreign investment flows as it affects currency returns for global investors. Meanwhile, higher crude oil prices remain a concern for oil-importing economies like India as they can influence inflation and the country’s trade balance.

Two Monthsof Buying Interrupted

The latest selling trend comes after FPIs showed renewed confidence in Indian equities during July and August. The two months of inflows had provided support to domestic markets after a prolonged period of foreign outflows.Market experts closely track FPI movement as it often reflects global investor sentiment and can influence liquidity conditions in Indian equity markets.Domestic institutional investors, including mutual funds and insurance companies, have increasingly played a larger role in balancing foreign fund movements in recent years.

Market Outlook

Going ahead, foreign investor flows are expected to remain sensitive to global cues, including movements in crude prices, interest rate expectations in the United States and currency trends.Analysts will also watch domestic economic data, corporate earnings and policy developments to assess whether foreign investors return to buying Indian equities.