FPI Outflows Cross Rs 1 Trillion in First Half of FY27, Sept Figures Highest in 6 Months
New Delhi: Foreign portfolio investors have taken out more than Rs 1 trillion from Indian equities in the first half of the ongoing financial year 2026-27 while shifting investments across sectors and to AI-heavy markets such as South Korea and Taiwan. The sale of Rs 256.62 billion is the highest monthly outflow in six months.
The Business Standard reports that high global yields, a strong dollar and expensive Indian stocks make investors more cautious about investing in India.
Investors have shifted away from financials, oil and gas and other major sectors towards services and consumer-focused sectors.
NSDL data states that the foreign portfolio investors have been net sellers in four out of six months in the first half of FY27. August and July witnessed strong buying, but the trend could not sustain and there were outflows of Rs 35,861 crore in September.
The report quoted that six-month selling is at Rs 129,187 crore and year-to-date at Rs 260,306 crore. Meanwhile, the companies on the Nifty 50 have added 1% in six months and lost 13% on a year-to-date basis.
The Nifty 50 and Sensex each fell about 5.7% in September,
Relatively better earnings visibility and domestic demand have directed them to services, consumer durables and consumer services. The flow observed remains volatile and selling pressure is expected to continue in the near term.
Ajit Mishra, senior vice-president of research at Religare Broking, told Business Standard, "Financials are bearing the brunt of foreign selling most significantly, given their high weight in the indices and sensitivity to liquidity and growth expectations. Oil and gas remains vulnerable to elevated crude prices, margin concerns and the broader pressure on India’s external balances.”
The financial sector has been hurt the most from the FPI selloff, recording outflows worth Rs 47,030 crore between April and September 15, according to the analysis.
The other sectors that saw major outflows include automobiles (Rs 22,507 crore), FMCG (Rs 16,876 crore) and telecommunications (Rs 16,861 crore). Services saw an inflow of Rs 14,237 crores followed by consumer durables at Rs 11,409 crores and consumer services at Rs 10,504 crores.
Meanwhile, AI-heavy markets such as South Korea and Taiwan continue to attract FPIs, as reported by The Economic Times. The report also notes how higher US Treasury yields raise the risk-free return available to investors, making emerging-market equities relatively less attractive.
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