Foreign portfolio investors sold Indian equities worth ₹45,125 crore in October’s first six trading sessions, nearly matching September’s outflows as high US bond yields and elevated crude oil prices weighed on investor sentiment.
Foreign portfolio investors (FPIs) sold Indian equities worth approximately ₹45,125 crore during the first six trading sessions of October 2026, intensifying pressure on domestic stock markets. The outflow was almost equal to the ₹45,536 crore withdrawn during the entire month of September, highlighting the scale of foreign selling.
The selling continued despite a recovery in Indian benchmark indices during the previous week, when the stock market ended an eight-week losing streak. Foreign investors remained net sellers in every trading session during October’s first six sessions and had recorded 11 consecutive sessions of net selling since mid-September.
High US bond yields reduce equity appeal
One of the major factors behind the outflows is the rise in US government bond yields. The yield on 10-year US Treasury bonds climbed above 5.3%, making relatively low-risk debt investments more attractive compared with equities in emerging markets such as India.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said elevated US bond yields were encouraging foreign investors to shift funds towards fixed-income assets. He added that a more favourable valuation and risk-reward balance could help improve foreign investor participation in Indian equities.
Rising crude oil prices add pressure
Elevated crude oil prices have emerged as another concern for the Indian market. Since India imports a substantial share of its oil requirements, higher prices can increase the import bill, put pressure on the rupee and raise inflation risks.
Expensive energy can also increase operating costs for companies across sectors, potentially affecting profit margins and earnings expectations. These concerns have contributed to cautious investor sentiment.
Foreign outflows weigh on market performance
With October’s selling, total foreign portfolio investor equity outflows for 2026 reached approximately ₹3.61 lakh crore, according to figures cited by market analysts. The Nifty 50 had declined around 13.87% year-to-date at the time of the report.
Despite heavy foreign selling, domestic institutional investors have helped absorb some of the pressure by purchasing shares. Their participation has provided support to the market during periods of substantial overseas withdrawals.
Inflation data and geopolitical developments in focus
Market participants are monitoring Indian and US inflation data, movements in US Treasury yields, crude oil prices and developments in US-Iran tensions. These factors could influence global risk appetite and the direction of foreign investment flows.
Analysts said foreign selling could ease if global bond yields decline, oil prices stabilise and Indian equity valuations become more attractive. Until these conditions improve, sustained foreign outflows could continue to create volatility in domestic markets.
