Mumbai, October 4 (Daily Kiran) : Foreign Portfolio Investors (FPI) significantly exited the Indian stock market in September 2026, selling equities worth ₹45,536 crore. Despite this, their interest in the primary market remained strong, with investments totaling ₹9,676 crore during the same period.
Market analysts have noted a sharp increase in foreign selling, primarily driven by the U.S. 10-year bond yield surpassing 5.2% and concerns over persistently high crude oil prices. Dr. V.K. Vijaykumar, Chief Investment Strategist at Geojit Investments, highlighted that the ongoing foreign sell-off has weakened the Indian stock market considerably, leading to a decline over eight consecutive weeks. He also pointed out that the 13% drop in rainfall this year has negatively impacted investor sentiment.
However, following the recent market correction, valuations of large-cap stocks have become more attractive. Experts believe this presents potential opportunities for long-term investors in quality large companies.
Analysts suggest that a halt or reversal in foreign selling will depend on positive indicators, such as a decrease in crude oil prices and a softening of U.S. bond yields. Reports indicate that foreign investors had a positive outlook in July and August due to expectations of falling crude oil prices, but that trend has since reversed.
Between September 28 and October 1, foreign investors sold approximately ₹34,965 crore in equities over just four trading sessions, while the reported equity selling for that period was ₹27,962 crore. This indicates a significant acceleration in foreign outflows at the end of September and the beginning of October.
Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, stated, “The selling in the secondary market and investment in the primary market suggest that foreign investors are not completely withdrawing from India. Instead, they are being more selective in their investment opportunities. This trend may continue into October.”
On the other hand, Domestic Institutional Investors (DII) provided robust support to the market, purchasing ₹76,030 crore in cash equities during September 2026. This strong domestic investment has largely mitigated the impact of foreign selling.
Market experts emphasize that the continuous buying by domestic institutional and retail investors has played a crucial role in preventing a significant downturn. Without this support, the market could have faced deeper weaknesses.
Looking ahead, market direction will largely depend on the results for the second quarter of the fiscal year 2026-27. Analysts believe that companies reporting better-than-expected results and presenting a positive outlook may attract investor interest.
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