Foreign investors continued their heavy selling in Indian equities, pulling out Rs 48,213 crore ($5.14 billion) in the first 10 days of April. The reason for this was that due to increasing geopolitical tension and global economic uncertainties, the risk appetite of investors had reduced.
This selloff comes after a record withdrawal of Rs 1.17 lakh crore (about $12.7 billion) in March, which was the largest monthly withdrawal till date. This sudden change was seen when FPIs had invested Rs 22,615 crore in February, which was the highest monthly investment in 17 months.
With the recent selloff, total outflows by foreign portfolio investors (FPIs) have increased to Rs 1.8 lakh crore so far in 2026. According to NSDL data, in April alone, foreign investors pulled out equities worth Rs 48,213 crore from the cash market till April 10. Market experts attributed this continuous selling to a combination of global economic challenges and increasing geopolitical risks.
Why did foreign investors sell?
Himanshu Srivastava, Principal – Manager Research, Morningstar Investment Research India, said the selling was mainly driven by risk aversion arising from rising tensions in West Asia. The tension pushed up crude oil prices and reignited concerns about inflation around the world. Reiterating similar concerns, VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said FPIs remain in a selling mood due to the energy crisis arising out of the West Asia conflict, its potential impact on the Indian economy and the continued weakening of the rupee. He also said that markets like South Korea and Taiwan are more attractive for FPIs right now, because the earnings growth expectations for India in FY27 are weak, whereas the earnings growth expectations in these markets are stronger.
How will be the mood going forward?
Even the recent ceasefire announcement between America and Iran could not stop this pace of selling. Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, said that FPIs used this relief rally as a liquidity window to make more withdrawals. According to Khan, the turnaround in investment flows will depend on three key things — reliable reopening of the Strait of Hormuz, stabilization of the rupee, and any positive news from India’s Q4 results season. He further said that the flows could be reversed rapidly, but only when macroeconomic conditions begin to support this change.