New Delhi, 20 September (H.S.): Foreign Portfolio Investors (FPIs) have continued to remain net sellers in the Indian equity market during September. After consistently playing the role of buyers in July and August, foreign investors appear to have started reducing their exposure to the Indian market this month. In just the first three trading weeks of September, FPIs have withdrawn Rs 20,974 crore from the Indian stock market.

Foreign Portfolio Investors have remained predominantly on the selling side for most of 2026. Except for February, July and August, foreign investors have consistently sold equities and withdrawn funds from the domestic stock market in all other months of the year. The selling was particularly aggressive in March. Prior to July, FPIs had also remained net sellers for three consecutive months — June, May and April.

In July, foreign portfolio investors bought more than they sold, resulting in a net investment of Rs 20,199 crore during the month. Similarly, in August, FPI purchases exceeded sales, with foreign investors investing Rs 30,919 crore in the Indian stock market. Before the buying seen in July and August, February was the only other month in 2026 when FPIs had remained net buyers. In February, they invested a total of Rs 22,615 crore.

According to data from Central Depository Services (India) Limited (CDSL), foreign portfolio investors sold equities worth Rs 35,962 crore in the domestic stock market in January, at the beginning of 2026. In February, FPIs shifted from selling to buying and invested Rs 22,615 crore in the Indian stock market.

The situation changed again in March. During the month, foreign portfolio investors engaged in broad-based selling in the stock market and withdrew a record Rs 1.17 lakh crore. The selling trend continued in April, when FPIs sold equities worth Rs 60,847 crore. In May, they sold another Rs 32,963 crore worth of shares in the stock market.

FPIs also withdrew Rs 49,340 crore from the domestic equity market in June. This was followed by net investment of Rs 20,199 crore in July and Rs 30,919 crore in August. However, foreign portfolio investors resumed aggressive selling in September, taking their net outflow for the month to Rs 20,974 crore so far.

The data indicate that foreign portfolio investors have remained predominantly net sellers from January through the third week of September 2026. Despite the purchases recorded in February, July and August, FPIs have cumulatively withdrawn Rs 2,43,353 crore from the domestic stock market through a combination of their buying and selling activity since the beginning of the year. In 2025, foreign portfolio investors had withdrawn a total of Rs 1.66 lakh crore from the Indian stock market after accounting for their overall buying and selling activity.

Market experts said that persistent global uncertainty, rising crude oil prices, higher US bond yields, weakness in the rupee against the US dollar and an increase in interest rates by the US Federal Reserve have prompted foreign investors to move money out of markets around the world and seek safer avenues. The impact of these factors is also visible in the form of continued FPI selling in the Indian market.

Ravi Chander Khurana, CEO of Khurana Securities and Financial Services, said three factors could be considered responsible for the sustained selling by foreign investors in September. These include high interest rates and elevated bond yields in the United States, a rise in crude oil prices amid geopolitical tensions, and weakness in the Indian rupee against the US dollar.

According to Khurana, the US Federal Reserve raised its benchmark interest rate by 0.25 percentage points at its September meeting, taking the rate from 3.75 percent to 4 percent. This has narrowed the yield differential between India and the United States, reducing the attractiveness of Indian assets for foreign investors.

Similarly, despite a decline in international crude oil prices, they have remained above the $100-per-barrel mark. Rising tensions in West Asia have kept oil prices elevated, increasing concerns over inflation and India's import bill. The rupee has also remained under pressure amid these challenging conditions. The Indian currency declined 1.1 percent last week, marking its steepest weekly fall in four months.

These factors have collectively contributed to foreign portfolio investors stepping up withdrawals from the Indian market.

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Hindusthan Samachar / Jun Sarkar