FPIs Start 2026 on Cautious Note, Pull Out ₹7,608 Crore From Indian Equities in Two Days

Foreign portfolio investors (FPIs) withdrew ₹7,608 crore from Indian equities in the first two trading sessions of January 2026.

Why it matters now: The selling extends a record outflow trend from 2025, signaling continued global risk aversion.

What changes for people: Persistent FPI exits could pressure stock markets and the rupee, affecting investor sentiment.

Who is affected: Equity investors, currency markets, and companies dependent on foreign capital.

Foreign portfolio investors have kicked off 2026 with caution, pulling out ₹7,608 crore, or about $846 million, from Indian equities in just the first two trading days of January, according to market data.

The move continues a sharp selling streak that dominated 2025, when FPIs recorded their largest-ever annual equity outflow of ₹1.66 lakh crore, reflecting heightened global uncertainty.

Why FPIs are selling early in 2026

Market experts attribute the sustained withdrawals to a mix of volatile currency movements, global trade tensions, and concerns over potential tariff actions by the United States.

Another key factor has been stretched valuations in Indian equities, which made markets vulnerable when global risk appetite weakened.

Impact on the rupee and markets

The heavy FPI selling through 2025 played a major role in the nearly 5% depreciation of the Indian rupee against the US dollar, analysts said. Continued outflows in early 2026 could keep currency volatility elevated, especially if global dollar strength persists.

Equity markets, meanwhile, may remain range-bound, with foreign selling offsetting domestic institutional inflows.

What officials and analysts are watching

Market participants say attention is now on global interest rate signals, trade policy developments, and currency trends, all of which will influence foreign investment decisions in the coming weeks.

While India’s economic growth outlook remains relatively strong, experts caution that global factors, not domestic fundamentals alone, will guide near-term FPI behaviour.

Sustained foreign selling, analysts warn, could test investor confidence if volatility spikes further.