economy · 2026-09-20
Foreign Investors Sell Indian Stocks Again
Photo: DFID - UK Department for International Development / Wikimedia (CC BY-SA 2.0)
FIIs pulled Rs 23,676 crore from Indian stocks this month because crude oil and US bond yields spiked, but they still poured Rs 2,703 crore into IPOs, so it's the secondary market they distrust, not India itself.
How much did FIIs buy back in July and August?
FIIs bought Rs 11,045 crore in July and Rs 10,231 crore in August, sparking hope of a turnaround after brutal selling from March to June, when outflows hit Rs 1.15 lakh crore in March alone. September has erased that hope, with Rs 23,676 crore in outflows through Sep 19.
Why did March alone see Rs 1.15 lakh crore in outflows?
The source ties the broader Jan-Jun selling streak, Rs 34,152 crore out in January alone, to the same global pressures now resurfacing: crude prices, US bond yields and geopolitical risk. March's Rs 1.15 lakh crore outflow was the sharpest single month, suggesting shocks can arrive suddenly even after a brief calm like February's inflow.
Was Feb's Rs 12,950 crore buying a false signal?
Feb's inflow broke a otherwise long selling spell, but it didn't last, similar to July-August. This pattern, brief relief followed by renewed selling, shows single-month inflows don't reliably signal a trend reversal when the underlying pressures, like crude and yields, haven't actually eased.
How did the Nifty react to the Jan-Jun selling wave?
The article doesn't give Nifty levels for the Jan-Jun period, but notes the index is down 3% from its August-end close of 24,080 during the current FII selling stretch, with DII buying limiting the damage rather than reversing it.
Why do FIIs still love India's IPO market?
FPIs have put Rs 48,550 crore into India's primary market this year, including Rs 2,703 crore up to Sep 19, even as they dump listed stocks. Analyst Dheeraj Gaur says foreign investors avoid the secondary market but 'can't seem to get enough of IPOs and fresh listings,' since new issues aren't yet hit by global risk-off selling.
Why does Rs 2,703 crore into IPOs matter so much?
Vijayakumar of the source notes Rs 2,703 crore in fresh IPO money up to Sep 19 helps explain why India's primary market boom continues despite tepid secondary market sentiment, since anchor books and new listings draw capital that hasn't been repriced by the global risk-off mood yet.
Could rupee weakness deepen this FII exit further?
Choice Wealth's Dheeraj Gaur says the debt side has worsened due to rising global yields, expensive oil and fresh rupee worries, which together pressure the currency further and can make Indian assets less attractive to hold, compounding the equity outflows already seen.
What would it take to call this a turnaround?
Gaur said FPIs sold in the cash market on three of the last four sessions before a single Rs 600 crore buying day on Friday, but called it insufficient. He said the market needs to see more green days before calling this anything other than a tough stretch.
Who is absorbing the damage from FII selling?
Domestic institutional investors bought Rs 36,219 crore month-to-date against FII selling of Rs 7,041 crore, per Bajaj Broking's Pabitro Mukherjee. DIIs have bought every week for a month straight while FIIs sold for five straight weeks, cushioning the Nifty's fall to just 3% below its August close of 24,080.
Why does Rs 11,232 crore DII buying not fully offset FII selling?
DIIs bought Rs 11,232 crore against FII selling of Rs 7,620 crore in one week, per Bajaj Broking, which helped the index recover from mid-week lows but didn't stop the Nifty from ending the month-to-date period down 3% from its August close.
What happens if crude prices keep climbing further?
Vijayakumar said future flows depend on the Iran-US conflict's effect on crude, since higher crude widens India's current account deficit, adds inflation pressure and weakens the rupee, all factors that make Indian equities less attractive to foreign holders regardless of DII support.
Could ordinary mutual fund investors be affected too?
DII buying largely comes from mutual fund inflows, meaning retail investors who invest through SIPs indirectly cushion the market when FIIs exit. The source doesn't quantify retail-level effects, but the sustained DII buying streak through five weeks reflects continued domestic fund inflows absorbing foreign selling.
Source: economictimes.indiatimes.com