FPIs Ditch India: ₹3,962 Cr Exodus Signals Market Strain
Overview
Foreign portfolio investors offloaded Indian equities worth ₹3,962.72 crore in the week ending January 9, 2026, continuing a 2025 selling trend. Geopolitical tensions and trade talk delays fueled selling, outweighing positive domestic economic outlooks and DII buying. The outflow has weighed on market sentiment, though debt segment saw mixed inflows and IT stocks attracted buying.
Foreign Investors Retreat from Indian Equities
Foreign portfolio investors (FPIs) divested Indian equities totaling ₹3,962.72 crore during the week concluding January 9, 2026, extending a selling spree initiated in the prior year. Data from the National Securities Depository Limited (NSDL) indicated intensified selling pressure on January 8 and 9, with outflows reaching ₹1,839.01 crore and ₹3,709.81 crore, respectively.
This outflow trend contrasts with optimistic expectations for early 2026, which anticipated FPIs turning buyers amidst anticipated improvements in GDP growth and corporate earnings. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that geopolitical events, including U.S. intervention in Venezuela and stalled trade talks, have dampened sentiment. Negative commentary from the U.S. commerce secretary further suggested delays in a crucial trade agreement, exacerbating FPI caution.
Market Performance and Sectoral Shifts
Despite robust domestic investor buying, with ₹17,900 crore flowing into equities by January 9, the Nifty index experienced a significant decline of 618 points during the week. This underperformance contrasts with a global risk-on rally, driven by geopolitical factors and improving U.S. earnings forecasts.
Sectoral analysis reveals FPIs favoring the IT sector, citing attractive valuations, rupee depreciation, and optimism surrounding AI-driven growth and potential U.S. interest rate cuts. Conversely, selling pressure was observed in FMCG stocks due to stretched valuations, financial services on profit-taking and margin concerns, and the auto sector amid moderating demand and pricing challenges.
The debt segment presented a mixed picture, with Foreign Allocation Route (FAR) recording net inflows of ₹2,938.13 crore. However, the General Limit and Voluntary Retention Route (VRR) witnessed outflows totaling ₹64.17 crore and ₹721.08 crore, respectively.
