Industry Odisha Bureau,Sep 13: Foreign investors withdrew ₹13,138 crore from Indian equities this September. Crude oil, rising US bond yields and a firm dollar drove the reversal after two months of buying.
FPI Selling Returns After July-August Buying
Foreign Portfolio Investors pulled ₹13,138 crore from Indian equities through September 11. This followed net buying during July and August. FPIs invested ₹20,200 crore in July, per CDSL data. They added ₹29,630 crore in August. Before that, FPIs were net sellers from March through June.
2026 FPI Outflows Reach ₹2.37 Lakh Crore
Total equity outflows in 2026 have climbed to ₹2.37 lakh crore. That already exceeds the ₹1.66 lakh crore withdrawn across all of 2025. NSDL data confirmed the September figure through September 11.
Crude Oil Above $100 Pressures Sentiment
Brent crude surged to $109.97 per barrel on September 11. It stayed above the $102 level reached in July. Heightened geopolitical uncertainty kept prices elevated. Vedant Gupte of Trackk called September selling “a dollar-and-crude story.” He said money leaves emerging markets when yields and oil both rise. Looking ahead, the Iran-US conflict is likely to keep influencing crude prices and FPI flows.
US Bond Yields and Dollar Weigh on FPIs
Rising US bond yields weighed on investor sentiment, said Pabitra Mukherjee of Bajaj Broking. A firm dollar added further pressure on risk appetite. Higher yields make dollar assets relatively more attractive to global investors. This can reduce demand for emerging-market equities.
Fed Rate Hike Expectations Add Pressure
Markets saw a high probability of a rate hike at next week’s FOMC meeting, Mukherjee said. V.K. Vijayakumar of Geojit Investments linked elevated crude prices with tighter monetary policy expectations. Higher inflation from costlier oil could push bond yields further up, he said. Vijayakumar noted that a US 10-year yield approaching 5% could trigger a sharp global equity correction. In that scenario, he said, FPIs might shift money toward higher-yielding bonds.
FPIs Also Withdraw From Indian Debt
Foreign investors extended selling into India’s debt market too. They withdrew ₹1,350 crore through the Fully Accessible Route. Another ₹955 crore left through the general route. FPIs still invested ₹29 crore through the Voluntary Retention Route
The September reversal underscores how sensitive FPI flows remain to global financial conditions. Crude oil, US yields and dollar strength have combined to weigh on emerging-market risk appetite. Analysts described these global forces as the dominant factor behind the latest selling. FPI direction into Indian equities will likely keep tracking these external pressures in the weeks ahead.
