New Delhi: Foreign investors continued to reduce their exposure to Indian equities and pulled out Rs 32,963 crore in May. Apart from FPIs, analysts also expect developments around the West Asia war, crude oil prices and RBI interest rate decision to determine the equity-market trend in the coming week.
According to NSDL data, the total outflow of foreign portfolio investors (FPIs) from the equity market so far in 2026 has come down to slightly less than Rs 2.3 lakh crore, up from about Rs 1.7 lakh crore pulled out during the whole of 2025.
Except February, FPIs were net sellers in all months of 2026. They pulled out Rs 35,962 crore in January before becoming net buyers in February when they infused Rs 22,615 crore, the highest monthly inflows in 17 months. However, the trend reversed in March, when foreign investors pulled out a record nearly Rs 1.2 lakh crore. The selling continued in April with a net withdrawal of Rs 60,847 crore and continued till May with a net withdrawal of about Rs 33,000 crore.
Market experts said FPIs are selling Indian equities due to weak earnings growth, rupee depreciation and more attractive opportunities in other markets. However, the pace of selling has slowed.VK Vijayakumar, chief investment strategist at Geojit Investments, said weak earnings growth in India compared to fairly strong corporate performance in markets such as the US, Japan, South Korea and Taiwan has prompted FPIs to shift capital abroad.Analysts said in the coming week, macroeconomic data announcements, trading activity by foreign investors and rupee-dollar trend will act as key drivers for equities.Ajit Mishra, SVP, Research, Religare Broking, said, “Participants will closely keep a close eye on global developments around the US-Iran situation and fluctuations in crude oil prices, which remain important for inflation expectations, currency stability and foreign inflows.”Last week, the BSE benchmark Sensex fell 640 points or 0.8%, and the NSE Nifty dropped 172 points or 0.7%.
