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- Foreign Investors Pull Rs 27,000 Crore In May From Indian Market; 2026 Outflows Cross Rs 2.2 Lakh Crore Mark
Mumbai1 hour ago
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Foreign investors (FPIs) have withdrawn cash worth ₹27,048 crore from the Indian stock market so far this month (May). Due to the global economic environment and geopolitical tensions, foreign portfolio investors are continuously reducing their stake in the Indian equity market.
With this latest selloff, the total outflow so far in 2026 has crossed ₹2.2 lakh crore, which is more than the total selloff in 2025.
FPI sold every month except February
According to data from National Securities Depository Limited (NSDL), foreign investors have been net sellers every month except February in the year 2026.
In January, investors had withdrawn ₹35,962 crore from the market. After this, the trend changed in February and they invested ₹22,615 crore, which was the largest inflow in a single month in the last 17 months.
A record of ₹1.17 lakh crore was made in March
After the relief in February, foreign investors sold shares worth a record ₹1.17 lakh crore in March. This trend of selling continued in April also, when there was a net outflow of ₹60,847 crore from the market. This weakness continued in May also and so far more than ₹27,048 crore has been withdrawn.
The total selling of ₹ 2.2 lakh crore so far in the year 2026 is much more than the entire last year. Throughout the year 2025, foreign investors had withdrawn a total of ₹ 1.66 lakh crore from the Indian stock market. This year this figure has been crossed in just five months.
Pressure increased due to strengthening of dollar-US bond yields
Himanshu Srivastava, Principal – Manager Research, Morningstar Investment Research India, said on this trend that due to uncertainty regarding global growth, ongoing geopolitical tensions in key regions and volatile crude oil prices, investor sentiment towards emerging markets has weakened.
He further said that the strong US dollar and increased US bond yields are the main reasons for this selloff. Due to better returns in developed markets, the attractiveness of safe assets has increased and investors are adopting a defensive stance. Apart from this, uncertainty regarding global inflation and timing of interest rate cuts by central banks is also influencing fund allocation decisions.
Pressure on rupee increased, reached the level of ₹ 96.14
According to VK Vijayakumar, Chief Investment Strategist, Geojit Investments, the rupee is under heavy pressure due to continuous selling by foreign investors and increasing current account deficit.
At the beginning of the year, the rupee was at the level of 90 against the dollar, which crossed the level of 96 on May 15 and reached 96.14.
Funds are being diverted towards AI companies
VK Vijayakumar said that if selling by foreign investors continues and crude oil prices remain high, the rupee may weaken further.
Along with this, large scale investments are being made across the world in companies focusing on Artificial Intelligence (AI).
Because of this, funds are being diverted from countries like India, which are considered a little behind in the field of AI. However, this trend may reverse when the current AI trade bubble subsides.
What are FPI and bond yields?
- Foreign Portfolio Investment (FPI): When citizens or companies of a country invest in the stock market, bonds or mutual funds of another country, it is called Foreign Portfolio Investment. They are also considered short-term investors who withdraw or invest money quickly depending on the market conditions.
- Bond Yield: Bond yield is the return or interest that an investor receives on investing in a bond. When the yield (return) of government bonds increases in developed countries like America, foreign investors start withdrawing money from risky stock markets like Indian market and investing in safe government bonds there.
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