FPI exodus continues, Rs 62,800 cr pulled out from equities in first fortnight of June
With the most recent outflows, whole withdrawals by Overseas Portfolio Traders (FPIs) from Indian equities have surged to Rs 2.87 lakh crore thus far in 2026, surpassing the Rs 1.66 lakh crore pulled out throughout the complete calendar 12 months 2025, in line with information from the Nationwide Securities Depository Ltd (NSDL).
Pabitro Mukherjee, Deputy Vice President-Analysis at Bajaj Broking, mentioned FPI flows within the coming week will rely upon developments within the US-Iran peace talks, the US Federal Open Market Committee’s coverage choice, the Financial institution of Japan’s fee choice and commentary from main central banks.
In keeping with NSDL information, FPIs have remained internet sellers in each month of 2026 besides February. They withdrew Rs 35,962 crore in January earlier than turning internet consumers in February, investing Rs 22,615 crore, marking the very best month-to-month influx in 17 months.
The pattern, nonetheless, reversed sharply in March, when international traders pulled out a file Rs 1.17 lakh crore. The promoting strain continued in April with internet outflows of Rs 60,847 crore and in Could with withdrawals of Rs 32,963 crore. In June, FPIs have already withdrawn Rs 62,853 crore through the first two weeks of the month.
Himanshu Srivastava, Principal, Supervisor Analysis, Morningstar Funding Analysis India, mentioned traders proceed to navigate an surroundings marked by elevated uncertainty across the interest-rate trajectory of main central banks, geopolitical developments and issues over international progress.
“In such phases, rising markets usually witness tactical de-risking as traders search security and rebalance portfolios in direction of developed markets and defensive belongings,” he mentioned.Srivastava added that India’s comparatively wealthy valuations in contrast with a number of emerging-market friends can also have prompted international traders to undertake a extra selective method in direction of allocations.
Market contributors mentioned the persistent depreciation of the rupee has emerged as one other key issue behind the sustained outflows.
The Indian forex has weakened practically 6 per cent thus far in 2026 and round 10 per cent over the previous 12 months, falling from the mid-80s degree to about 95 in opposition to the US greenback regardless of efforts by the Reserve Financial institution of India (RBI) to stabilise the forex.
Nonetheless, the tempo of FPIs outflows moderated considerably within the latter half of final week, indicating that whereas danger aversion remained elevated, the depth of international promoting eased steadily.
On Friday, FPIs bought equities value solely Rs 1,082 crore within the money market.
V Ok Vijayakumar, Chief Funding Strategist at Geojit Investments, mentioned latest geopolitical developments and expectations of a peace settlement between the US and Iran have resulted in a pointy correction in Brent crude costs to beneath USD 87 per barrel.
“For a big oil importer like India, this can be a important optimistic. India is dealing with a stability of funds deficit of about USD 60 billion in FY27,” he mentioned.
Given the significance of international portfolio flows in financing the present account deficit and supporting the stability of funds, policymakers have introduced a collection of measures aimed toward attracting abroad capital.
These embody the RBI absorbing hedging prices on FCNR deposits mobilised by business banks, increasing the foreign exchange swap window, growing entry to authorities bonds by means of the Absolutely Accessible Route (FAR), and elevating funding limits for non-resident Indians and abroad residents of India in home equities.
In distinction to the fairness outflows, FPIs invested greater than Rs 13,200 crore in debt securities by means of the FAR route through the first fortnight of June, taking whole investments by means of this channel to almost Rs 28,000 crore thus far this 12 months.
