Foreign institutional investors (FIIs) have sold domestic shares worth Rs 2.06 lakh crore in 2026, and they remain net sellers for the third consecutive month. If we talk about May, till now foreign investors have sold Rs 14,231 crore from the stock market. On Friday, FIIs sold domestic shares worth Rs 4,110.60 crore, while domestic institutional investors (DIIs) were net buyers worth Rs 6,748.13 crore. Despite efforts from domestic investors, the benchmark index recorded a huge fall on Friday. This was the second consecutive day when the indices fell due to heavy selling in financial stocks. Nifty fell 150.50 points or 0.62 per cent to close at 24,176.15, while BSE Sensex fell 516.33 points or 0.66 per cent to 77,328.19.
How long will foreign investors remain angry?
Commenting on the current trend, TrustLine Holdings CEO N. Arunagiri said that despite the sale of about $ 50 billion from September 2024 till now, selling by FIIs in the domestic markets continues. This is happening at a time when South Korea has received investment of approximately $4 billion and Taiwan has received investment of approximately $5.5 billion. Arunagiri said that India is still not getting its fair share in the allocation of emerging markets. This clearly shows that FIIs are currently not finding India that attractive from the allocation point of view.
As a result, the performance of large-cap stocks has been below expectations, while strong domestic investment flows have continued to support the SMID (small and mid-cap) segment. Unless FIIs adequately increase their investment allocation in India, the performance of stocks in the market is likely to depend largely on their own merits. That is, instead of the momentum rally of large-cap stocks, the market will get momentum only from clarity in the earnings of companies and ‘bottom-up’ opportunities.
Which factors will be important
Bajaj Broking said that going forward the activities of institutional investors are expected to be largely influenced by global developments. He said that monitoring the progress or decline in the ongoing talks between America and Iran will be an important factor. This can have a deep impact on geopolitical stability and fluctuations in crude oil prices. In the current situation, crude oil of Gulf countries is more than $ 100 per barrel. If experts are to be believed, there may be fluctuations in the prices of crude oil in the coming days.
How did foreign investors sell out in 2026?
Heavy selling due to war in March made it the worst month of this year, which saw a withdrawal of Rs 1,17,775 crore. April was also not very good, in which there was a withdrawal of Rs 60,847 crore. Foreign investors became net buyers in February, buying shares worth Rs 22,615 crore in the domestic markets. In January, he had sold shares worth Rs 35,962 crore. In 2025, FIIs’ buying sentiment was mixed, but the overall trend was bearish. They withdrew Rs 1,66,286 crore from Indian markets as trade deal delays and high valuations weighed on investor morale.
