FPIs take out nearly Rs 33k cr from Indian equities in May

NEW DELHI: Foreign investors continued to pare their exposure to Indian equities, withdrawing Rs 32,963 crore in May. Besides FPIs, analysts expect developments around the West Asia war, crude oil prices, and the RBI's interest rate decision to determine the equity-market trend in the event-heavy week ahead.

In 2026 so far, the total outflow by foreign portfolio investors (FPIs) from the equity market has reached just under Rs 2.3 lakh crore, which is higher than the nearly Rs 1.7 lakh crore pulled out during the entire 2025, according to data with the NSDL.

FPIs were net sellers in all months of 2026, except Feb. They withdrew Rs 35,962 crore in Jan before turning net buyers in Feb, when they invested Rs 22,615 crore, the highest monthly inflow 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 net outflows of Rs 60,847 crore and extended into May with withdrawals of nearly Rs 33,000 crore.

FPIs have been selling Indian equities due to a combination of weak earnings growth, rupee depreciation and more attractive opportunities in other markets, market experts said. However, the pace of selling has been moderated.

Geojit Investments chief investment strategist V K Vijayakumar said subdued earnings growth in India, compared with significantly stronger corporate performance in markets such as the US, Japan, South Korea and Taiwan, has prompted FPIs to shift capital overseas.

In the week ahead, macroeconomic data announcements, trading activity of foreign investors and the rupee-dollar trend would act as key drivers for equities, analysts said.

"Participants will closely monitor global developments surrounding the US-Iran situation and movement in crude oil prices, which continue to remain critical for inflation expectations, currency stability, and foreign flows," Ajit Mishra, SVP, research, Religare Broking, said.

Last week, the BSE benchmark sensex dropped 640 points, or 0.8%, and the NSE Nifty declined 172 points, or 0.7%.
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