FPI selling in 2026 follows ₹1.66 lakh cr 2025 outflow

Early 2026 begins with continued FPI selling

Foreign portfolio investors extended their selling streak into the first sessions of 2026. Preliminary NSE data showed FPIs were net sellers for a third straight session on Wednesday. They disposed of equities worth ₹1,527 crore on a net basis, after selling ₹106 crore in the previous session. Over the initial three trading days of the new year, overseas funds withdrew close to ₹7,000 crore. NSDL-reported weekly activity around early January also showed alternating inflows and outflows, with heavier selling concentrated in the final two trading days. The overall picture remained consistent with how 2025 ended, with repeated bouts of net equity selling. For domestic investors, these early numbers matter because they set the tone for risk appetite and liquidity at the start of the year.

2025: the scale of equity withdrawals

Data cited from NSDL showed that in 2025, FPIs net sold Indian equities worth about ₹1.66 lakh crore, or roughly ₹166,000 crore. The same outflow was described as around $19 billion in dollar terms. Another data point pegged 2025 equity selling at around ₹1.6 lakh crore, calling it the most in about two decades. A separate estimate described a record $18.4 billion outflow by mid-December, higher than the earlier peak of $16.5 billion in 2022. By December 26, NSDL data showed FPIs had taken out about ₹1.58 lakh crore from Indian equity markets. The persistence of selling meant FPIs were net sellers in eight of 12 months during 2025. The year also followed a pattern of sharp risk-off phases interspersed with short bursts of buying.

What strategists flagged about markets and the rupee

Geojit Investments Limited’s Dr. K. Vijayakumar said FII investment at the start of 2026 began as a continuation of the previous year’s trend. He linked the 2025 net selling of ₹166,283 crore to weaker market performance. He also said the rupee depreciated by around 5 percent during the period. Those comments reflected a commonly tracked channel through which foreign flows affect India’s broader financial conditions. Heavy equity selling can tighten liquidity in specific pockets of the market, particularly where foreign ownership is high. It can also raise hedging demand in currency markets when investors repatriate or reduce exposure. While equity returns are driven by many factors, sustained foreign selling is closely watched as a sentiment gauge. The early-2026 flow numbers therefore received attention beyond just the daily trading statistics.

How 2025 unfolded: sharp early exits and brief recoveries

FPIs began 2025 on a weak footing, withdrawing over ₹78,000 crore in January. The selling was linked in the report to rupee depreciation, higher US bond yields, and expectations of a tepid earnings season. The outflow continued through March, taking the cumulative exit in the first three months to about ₹1.16 lakh crore, amid escalation in global trade tensions. There was then a rebound phase, with net investments of ₹38,600 crore between April and June. But the recovery did not hold, and sales resumed from July through September. October stood out as a brief return to buying, with a net investment of ₹14,610 crore. FPIs then turned net sellers again in November and December amid weak global cues. This stop-start pattern mattered because it contributed to choppy market breadth even when headline indices held up at times.

Year-end selling accelerated across multiple sessions

Toward the end of 2025, daily selling prints became larger and more frequent. On the last trading day of the year, FPIs remained net sellers for a seventh consecutive session and offloaded ₹3,597.38 crore, according to provisional NSE data. The day before, they sold ₹3,844 crore, and on the prior session they offloaded ₹2,759.89 crore. The report also noted that the week before saw consistent selloff totaling more than ₹4,500 crore. Separately, FPIs withdrew ₹3,141.56 crore on December 26, extending the selling trend into the concluding trading week. That December 26 withdrawal brought the total net withdrawal for the week to ₹3,131.35 crore over four trading days, as cited. Such late-year intensity can influence positioning into the next year because many funds reset exposures and rebalance risk. It also shapes how domestic flows are assessed, since local buying often offsets foreign selling during risk-off phases.

Equity vs debt: contrasting foreign flows

Even as equity flows were negative, the report highlighted meaningful foreign interest in debt. As per depository data cited, FPIs had taken out about ₹1.58 lakh crore from equities while investing over ₹59,000 crore in the debt market till December 26. This divergence suggested that foreign investors were not uniformly exiting India risk, but were shifting preference across instruments. Debt flows can respond to different drivers than equities, including interest rate differentials and currency hedging costs. The equity outflow, however, was described as the worst year for equity flows, surpassing the earlier record outflow of ₹1.21 lakh crore in 2022. The contrast was starker given that 2024 saw a marginal net inflow of ₹427 crore into equities. Together, these figures underscored how rapidly foreign allocations can change with global rates and risk sentiment. For investors, the split also matters because it affects which segments of Indian markets receive incremental foreign liquidity.

Sector lens: IT saw heavy selling in 2025

The report also pointed to sector-level pressure, particularly in information technology. In 2025 alone, FPIs offloaded $1 billion worth of stocks from the Indian IT sector. This sector is often sensitive to global growth expectations and currency moves due to its export orientation. Large foreign ownership in several IT names can amplify the effect of FPI reallocations. The cited $1 billion selling added to the broader narrative of risk reduction by overseas funds. It also helped explain why certain sectors could lag even when domestic flows were supportive. Sectoral selling is closely tracked because it can affect index leadership and earnings-perception cycles. The magnitude of IT selling, as cited, stood out within the broader ₹1.6 lakh crore to ₹1.66 lakh crore equity outflow context.

Key numbers at a glance

Why these flows mattered for market participants

The sustained equity selling in 2025 and the continuation into early 2026 affected how investors judged market resilience. Large foreign outflows can weigh on sentiment, particularly in sectors with high foreign shareholding. They can also interact with currency dynamics, as highlighted by the cited roughly 5 percent rupee depreciation during 2025. The reports attributed the 2025 selling backdrop to volatile currency moves, global trade tensions including potential US tariffs, and stretched valuations. Separately, the pattern of heavy selling days late in December showed how quickly risk appetite can deteriorate near key calendar points. At the same time, the presence of debt inflows indicated that foreign flows were more nuanced than a broad-based India exit. For domestic investors, these cross-currents help explain why market performance can diverge across sectors and styles in the same period. The early-2026 selling figures will therefore be watched alongside upcoming flow updates from NSE and NSDL.

Conclusion

FPIs started 2026 as net sellers, extending a trend that saw around ₹166,000 crore leave Indian equities in 2025. With equity outflows large but debt inflows still positive, the next depository and exchange updates will be key to tracking whether the pattern persists.