Whalesbook
Foreign portfolio investors (FPIs) withdrew ₹13,740.89 crore from Indian markets in the week ending May 15, 2026. This outflow represents the fourth consecutive week of selling, signaling a cautious stance among global investors.
Daily Trading Activity
The selling pressure began early in the week. On Monday, May 11, FPIs withdrew ₹1,131.77 crore. Tuesday saw the steepest exit, with ₹7,545.99 crore leaving the market, primarily from equities, which alone dropped by ₹7,822.29 crore. A brief positive turn occurred on Wednesday, with a net buy of ₹346.37 crore. However, Thursday brought another significant outflow of ₹3,579.50 crore. Friday concluded the week with a total outflow of ₹1,830.00 crore, although selective buying in equities saw a net inflow of ₹1,111.53 crore on the final day. Overall, equities accounted for ₹12,817.11 crore of the week's outflows.
Factors Driving Foreign Outflows
Analysts attribute the sustained FPI exodus to a combination of factors. A weakening rupee, elevated crude oil prices, and a general caution towards riskier assets in global markets have dampened investor appetite for emerging economies. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented, "this year’s total FPI selling, so far, has exceeded the total selling last year." He also noted capital shifting away from countries perceived as AI laggards, like India, towards AI-centric companies globally.
Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India, added that ongoing global growth uncertainty, geopolitical tensions, and crude oil price volatility are major deterrents. A stronger US dollar and rising US bond yields also made safer investments more appealing, drawing capital away from markets such as India.
Domestic Investors Step In
Despite the significant foreign outflows, domestic institutional investors offered crucial support. Estimates place DII net purchases at around ₹18,524-18,525 crore for the week. This robust domestic buying absorbed a substantial part of the foreign selling, helping to stabilize benchmark indices. Looking ahead, market participants will closely monitor developments in US-Iran tensions, oil price trajectories, and upcoming quarterly corporate earnings. Some experts suggest policy interventions, such as launching FCNR dollar deposits or offering tax concessions for FPIs, could be necessary to stabilize flows and support the rupee.