Foreign portfolio investors (FPIs) sold Indian shares worth Rs 34,843 crore in October, the second month in a row of heavy withdrawals. Worries about high crude oil prices, global interest rates and the outlook for company earnings weighed on their decisions.
The month ended on a better note, though. Foreign investors put in about Rs 6,300 crore between October 26 and 30. In the week ended October 23, they had been net sellers to the tune of nearly Rs 2,700 crore.
Data from the Central Depository Services Ltd (CDSL) shows FPIs pulled out Rs 35,861 crore in September. Before that, they had been buyers, investing Rs 20,200 crore in July and Rs 29,631 crore in August.
With the latest selling, total FPI outflows from Indian equities in 2026 have reached Rs 2.95 lakh crore.
One good week, not yet a trend
Market experts said the recent pickup points to a change in near-term mood, but a single week of buying does not prove that the selling trend has turned for good.
Anand K Rathi, co-founder of MIRA Money, said foreign selling stayed significant over October as a whole. He pointed to concerns over crude prices, global interest rates and corporate earnings.
Rathi said higher crude prices threaten India’s inflation and company margins. He added that attractive yields in the US continue to shape where global money goes.
According to him, whether the recent improvement lasts will depend on clearer signals on the global economy, crude prices and the earnings outlook. He also noted that domestic institutional investors have played an important part in soaking up foreign selling and keeping the market steady.
Signs of changing sentiment
FPIs were net buyers in three of the four trading sessions ending October 30 in the cash market. That hints at a possible improvement in their view of Indian equities.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, listed a few things that may have helped. These include the US Federal Reserve’s decision to hold interest rates, attractive valuations in Indian large-cap stocks and signs of steady domestic economic growth.
He said a weakening of the global AI trade could also be influencing how portfolios are allocated.
The better flows also helped the Nifty move back above the 23,000 level.
Vijayakumar said foreign investors kept selling large-cap financial stocks. At the same time, they were picking up pharmaceutical and healthcare shares, along with some digital platform companies, in a selective manner.
What to watch
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, called the turnaround in FPI flows encouraging for market sentiment. However, he said high crude prices and global event risks could limit how far the momentum goes.
In the coming week, market participants will closely follow the result of the US mid-term elections and movements in Brent crude prices. They will also track developments in the US-Iran and Russia-Ukraine conflicts, as well as the ongoing quarterly earnings announcements.
Mukherjee said these factors are likely to remain the main drivers of investor sentiment in the near term.
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