FPIs in selling spree, offload 44% of August inflows in 10 days

Financial data displays price trends and movements on a trading screen during market hours | Photo Credit: The Hindu Foreign portfolio investors (FPIs) have offloaded Indian equities stocks worth ₹13,138 crore in the first 10 trading sessions of this month, data showed. The selling has already wiped out 44% of the ₹29,631 crore net inflow recorded by foreign investors in August, raising concerns that the brief revival in foreign flows seen in July and August may be losing momentum.FPIs have been net sellers of Indian equities for most of 2026. Their cumulative net outflow from the stock market has reached ₹2,37,579 crore in the first eight months and 10 days of the year, making it a record annual sell-off so far.Foreign investors have been reducing their exposure to Indian equities for nearly three years, barring intermittent periods of strong inflows. July and August were notable exceptions, with FPIs turning net buyers during both months.“There are indications of FPI flows again turning negative after the positive flows in July and August,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.However, foreign investors have shown greater interest in India’s IPOs and primary market. “FPI investments through the primary market up to September 12 stood at ₹1,336 crore, taking their total primary-market investment this year to ₹47,183 crore, Mr. Vijayakumar said.Valuations, currency weigh on sentimentAnalysts attribute the renewed selling pressure largely to elevated Indian equity valuations relative to corporate earnings. Weak returns from the benchmark Nifty, particularly after adjusting for rupee depreciation, have further reduced the attractiveness of Indian equities for dollar.Persistent foreign portfolio outflows are adding to pressure on the rupee, prompting the Reserve Bank of India (RBI) to announce measures to attract dollar-denominated deposits from non-resident Indian (NRI) customers of domestic banks.The rupee weakened for the fifth consecutive session, closing at ₹95.88 against the US dollar on Tuesday, down around 30 paise from its previous close of ₹95.54, according to CCIL data.The currency remains vulnerable to global macroeconomic factors, particularly movements in US monetary policy and crude oil prices. The continued exit of foreign investors from Indian equities has also added to pressure on the domestic currency.“The Indian rupee extended its losses for the fifth consecutive session, dragged down by a persistent surge in global bond yields and rising crude oil prices amid ongoing supply disruptions. Heightened risk aversion ahead of the critical FOMC rate decision further weighed on Asian currencies, including the domestic rupee. In the near term, the spot USD/INR pair has resistance at 96.30, with support pegged at 95.45 with bias favouring the dollar bulls,” Dilip Parmar, Research Analyst, HDFC Securities. Published - September 15, 2026 07:03 pm IST