FPIs pull out ₹34,843 crore from Indian equities in October, but turn net buyers end of the month

Foreign portfolio investors (FPIs) withdrew ₹34,843 crore from Indian equities in October, marking the second consecutive month of heavy outflows, amid concerns over higher crude oil prices, global interest rates, and the outlook on corporate earnings.

However, foreign investors turned net buyers towards the end of the month, infusing around ₹6,300 crore from October 26 to October 30 when compared with net outflows of nearly ₹2,700 crore in the week ended October 23.

According to data from the Central Depository Services Limited, FPIs withdrew ₹35,861 crore in September. Before that, they had invested ₹20,200 crore in July and ₹29,631 crore in August.

With the latest withdrawals, cumulative FPI outflows from Indian equities in 2026 have reached ₹2.95 lakh crore.

The recent improvement in flows signals a shift in near-term sentiment, but one week of buying does not necessarily indicate a sustained reversal, market experts said.

“For October as a whole, foreign selling remained significant, reflecting concerns around elevated crude oil prices, global interest rates and the outlook for corporate earnings,” Anand K. Rathi, co-founder of MIRA Money, said.

Higher crude prices pose risks to India’s inflation and corporate margins, and attractive yields in the U.S. continue to influence global capital allocation, he added.

The sustainability of the recent improvement in foreign flows would depend on greater clarity on global macroeconomic conditions, crude prices, and the earnings outlook, Mr. Rathi said. Domestic institutional investors have also played an important role in absorbing foreign selling and supporting market stability.

Meanwhile, FPIs were net buyers in three of the four trading sessions ending October 30 in the cash market, signalling a possible improvement in their outlook towards Indian equities.

The U.S. Federal Reserve’s decision to hold interest rates, attractive valuations in Indian large cap stocks, and signs of sustained domestic economic growth could have contributed to the change in investor sentiment, V. K. Vijayakumar, chief investment strategist at Geojit Investments, said.

The weakening of global AI trade could be another factor influencing portfolio allocation, he added.

The improvement in FPI flows also helped the Nifty reclaim the 23,000 level.

While foreign investors continued to sell large cap financial stocks, they were selectively accumulating pharmaceutical and healthcare stocks, along with select digital platform companies, Mr. Vijayakumar said.

Pabitro Mukherjee, deputy vice president of research at Bajaj Broking, said the reversal in FPI flows was encouraging for market sentiment, although elevated crude prices and global event risks could limit the momentum.

Market participants will closely track the outcome of the U.S. mid-term elections in the coming week, along with movements in Brent crude prices, developments in the U.S.-Iran and Russia-Ukraine conflicts, and ongoing quarterly earnings announcements.

These factors are expected to remain key drivers of investor sentiment in the near term, Mr. Vijayakumar said.