FPIs pull out Rs 34,843 cr from equities in Oct; turn net buyers last week

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

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

With the latest withdrawals, cumulative FPI outflows from Indian equities in 2026 have reached Rs 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 US continue to influence global capital allocation, he added.

Rathi said the sustainability of the recent improvement in foreign flows would depend on greater clarity on global macroeconomic conditions, crude prices and the earnings outlook. 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 US 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, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

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, Vijayakumar said.

Pabitro Mukherjee, Deputy Vice President-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 US mid-term elections in the coming week, along with movements in Brent crude prices, developments in the US-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, he added.