Foreign Investors Offload ₹45,000 Crore in Indian Stocks
A significant selloff by foreign institutional investors has led to a staggering ₹45,000 crore divestment in Indian equities over just six trading sessions.
Foreign investors have sold ₹45,000 crore worth of Indian equities in six sessions.
The selloff is attributed to rising US bond yields making safer investments more attractive.
Market analysts predict continued pressure on Indian equities unless bond yields stabilize.
In a remarkable turn of events, foreign institutional investors (FIIs) have divested ₹45,000 crore from Indian equities over the past six trading sessions. This trend marks a continuation of their bearish stance, as they have been net sellers for 11 consecutive sessions since mid-September. Despite the Indian stock market breaking an eight-week losing streak last week, the outflow of foreign capital remains a significant concern for investors.
The recent selloff is largely driven by soaring bond yields in the United States, which have reached multi-year highs. The yield on 10-year US Treasury bonds has climbed above 5.3%, surpassing levels not seen since 2007, making risk-free returns from the debt market more appealing than equities. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted that the total foreign portfolio investment (FPI) equity selling in 2026 has now reached ₹3,60,952 crore, contributing to a negative 13.87% return on the Nifty index this year.
Analysts suggest that the current outflows are primarily influenced by the attractive returns from US bonds, which have been above 5.2%. Vijayakumar noted that unless US bond yields decline, FIIs are likely to continue their selling spree. The market is currently facing headwinds from elevated crude oil prices and high bond yields, which are exerting pressure on stock valuations.
Looking ahead, market participants are expected to closely monitor inflation data from both the US and India, along with fluctuations in US bond yields and Brent crude prices. Pabitro Mukherjee, Deputy Vice President of Research at Bajaj Broking, indicated that geopolitical tensions, particularly between the US and Iran, could also impact market dynamics in the near term.
From a technical perspective, analysts have identified the 22,350–22,330 range as immediate support for the Nifty index. A decisive drop below this level could lead to further selling pressure, while a sustained move above 22,660–22,680 might trigger short covering and a potential recovery towards 22,820. However, sustained buying is essential for confirming any recovery, as the market remains sensitive to external economic factors.
