Foreign Portfolio Investors Begin 2026 With Continued Selling Pressure in Indian Equities

FPIs Pull Out ₹7,608 Crore in First Two Trading Sessions of January​

Foreign portfolio investors have started 2026 on a cautious footing, extending the selling trend seen last year. In the first two trading sessions of January, FPIs withdrew ₹7,608 crore, or USD 846 million, from Indian equities.

The early-year outflow follows a sharp withdrawal of ₹1.66 lakh crore, or USD 18.9 billion, recorded during 2025. The heavy selling last year was linked to volatile currency movements, global trade-related uncertainties, concerns over potential US tariffs, and elevated market valuations.

Rupee Depreciation Adds to Market Pressure​

Sustained selling by foreign investors played a significant role in the nearly 5 percent depreciation of the Indian rupee against the US dollar during 2025. The continued outflows at the start of 2026 indicate that foreign investors remain cautious amid evolving global and domestic market conditions.

January Trend Reflects Historical Pattern​

Data from National Securities Depository Limited shows that FPIs pulled out nearly ₹7,608 crore from Indian equities between January 1 and January 2. Historically, January has often seen restrained foreign investor participation, with net withdrawals recorded in most of the past ten years.

Global Cues Remain Key for FPI Flows​

FPI activity continues to remain highly sensitive to global developments and macroeconomic signals. While valuation-related pressures that dominated the previous year appear to have eased to some extent, foreign investor flows at the start of 2026 reflect a guarded approach as markets assess broader economic and financial trends.