FPIs pull out ₹8,731 crore from equities, turn net sellers for the week

Market participants are expected to track Brent crude price movements.

Foreign Portfolio Investors (FPIs) turned net sellers of Indian equities during the week ended September 4, 2026, pulling out ₹8,731.33 crore (US$ 917.05 million), reversing a two-month buying streak seen in July and August, according to data compiled by the National Securities Depository Limited (NSDL).

“FIIs were net seller for three sessions during last week including the quarterly MSCI index rebalancing session on Monday, August 31, 2026. While DIIs were net buyer in all five sessions during last week,” said Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, stating that market remained volatile on back of the rise in global oil prices as well as evolving US-Iran geopolitical tensions.

The equity sell-off was led by heavy outflows on September 1, when FPIs net sold shares worth ₹5,432.83 crore, followed by further selling of ₹953.84 crore on September 3 and ₹2,820.66 crore on September 4. FPIs briefly turned buyers on September 2, infusing ₹1,764.20 crore, while the week had begun with a net outflow of ₹1,288.20 crore on August 31.

Across all asset classes tracked by NSDL, equity, debt, hybrid instruments, mutual funds and Alternative Investment Funds (AIFs), FPIs recorded a combined net outflow of ₹11,620.81 crore (US$ 1,221.33 million) for the week.

The debt segment saw a combined net outflow of ₹443.80 crore. Within debt, the General Limit category attracted a net inflow of ₹311.51 crore, while the Voluntary Retention Route (VRR) and Fully Accessible Route (FAR) categories recorded net outflows of ₹15.99 crore and ₹739.32 crore, respectively.

Hybrid instruments saw the sharpest reversal, with net outflows of ₹2,545.15 crore for the week, largely on account of a single-day outflow of ₹3,451.63 crore on September 3. Mutual funds were the only segment to post net inflows for the week, at ₹99.47 crore, while AIFs recorded no net activity.

On a month-to-date basis, up to September 4, FPIs remained net sellers in equities to the tune of ₹7,443 crore, with the overall FPI position across all segments at a net outflow of ₹10,289 crore for September so far, NSDL data showed. This follows net equity inflows of ₹20,200 crore in July and ₹29,631 crore in August.

Benchmark indices extended their decline for a fourth straight week, with the Nifty closing lower on four of five sessions and forming a mid-week low before recovering some ground into the close, Mukherjee said. The Bank Nifty relatively outperformed the benchmark, while broader markets were mixed, with the Nifty Midcap index ending the week lower even as the Nifty Smallcap index closed marginally higher.

Commenting on the trend, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the “tapering of the chip trade and the FPIs turning consistent sellers in the chip stocks in South Korea and Taiwan have played an important role in bringing the FPIs back to India” in recent months. He added that “the resilience of the Indian economy... and the better-than-expected Q1 earnings numbers and stabilisation of the rupee are other positive factors” supporting flows into India. However, he cautioned that “it would be irrational to expect significant FPI flows into India” given that global bond yields, including on US Treasuries, continue to rise.

Going forward, market participants are expected to track Brent crude price movements, the evolving US-Iran geopolitical situation, and upcoming US inflation data ahead of the Federal Reserve’s mid-September policy meeting, Mukherjee added.

Published on September 6, 2026