FPI Selloff: Financials worst hit by outflows in first half of May. What are foreign investors buying and selling most?
FPIs have sold Indian equities worth ₹2,18,273 crore so far in 2026, up to May 20. In the first half of May alone, FPI outflows stood at ₹26,304 crore, according to data from NSDL.
Foreign portfolio investors (FPIs) have remained persistent sellers in the Indian stock market this year, with cumulative outflows already surpassing the total recorded in the previous calendar year.
The sustained selling pressure comes amid rising global bond yields triggered by uncertainty surrounding the US-Iran war, subdued domestic earnings growth, and continued global capital allocation toward artificial intelligence (AI)-focused companies.
The trend of AI-driven investments attracting global capital flows has also contributed to a shift away from markets such as India, which are perceived as lagging in the AI ecosystem.
FPIs have sold Indian equities worth ₹2,18,273 crore so far in 2026, up to May 20. In the first half of May alone, FPI outflows stood at ₹26,304 crore, according to data from NSDL.
Persistent foreign outflows have weighed on both Indian equities and the domestic currency. The benchmark Nifty 50 index has declined 9.5% on a year-to-date (YTD) basis, while the rupee has weakened to record low levels, breaching the 96 mark against the US dollar.
“Since valuations in India are fair, and even attractive in certain pockets, FPIs may turn buyers, infusing some optimism into the market. Much will depend on crude oil prices and stability in the rupee. Q4 earnings have been encouraging so far. However, the adverse impact of the energy crisis is likely to be reflected in Q1 FY27. If crude oil prices continue to moderate, the remaining quarters could see relatively stable performance,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.
Sectors witnessing the highest FPI selling
The Financial Services sector recorded the highest FPI outflows during May 1–15, with foreign investors pulling out ₹17,960 crore. This was followed by the Oil, Gas & Consumable Fuels sector, which saw outflows of ₹6,885 crore, NSDL data showed.
During the first half of May, the Telecommunication sector witnessed FPI selling worth ₹2,542 crore, followed by Information Technology ( ₹1,643 crore), Fast Moving Consumer Goods (FMCG) ( ₹1,625 crore), and Construction Materials ( ₹1,207 crore).
Consumer Durables and Power sectors also witnessed significant outflows of ₹1,162 crore and ₹1,157 crore, respectively.
Meanwhile, sectors such as Construction, Chemicals, Realty, Healthcare, Consumer Services, and Automobiles & Auto Components recorded FPI selling in the range of ₹300 crore to ₹900 crore.
Sectors attracting FPI inflows
Despite broad-based selling, some sectors continued to attract foreign investments. The Services sector saw the highest FPI inflows at ₹7,019 crore, followed by Capital Goods with inflows of ₹2,645 crore and Metals & Mining at ₹1,698 crore.
About the Author
Ankit Gohel is the Deputy Chief Content Producer at Livemint, specialising in financial markets, macroeconomics, and regulatory developments. With a strong focus on equity markets, primary issuances, and policy-driven market movements, he brings clarity to complex financial developments for investors and market participants. <br><br> With nine years of experience in business and financial journalism, Ankit’s approach is rooted in the belief that market reporting should go beyond headlines — connecting data, policy, and ground realities to deliver actionable insights. His work consistently bridges the gap between institutional analysis and investor understanding. <br><br> Ankit has spent three years at Livemint, where he currently helps drive market coverage, editorial strategy, and high-impact financial stories. Prior to this, he worked with leading business news networks such as CNBC-TV18, ET Now, TickerPlant News Service where he built deep expertise in stock market analysis, macroeconomic trends, primary markets, and coverage of key regulators including the RBI and SEBI. <br><br> Over the years, he has covered market cycles across bull and bear phases, IPO booms, liquidity shocks, and major policy shifts that reshaped investor sentiment. He has interviewed fund managers, corporate leaders, and policymakers, translating their perspectives into sharp, data-backed narratives. Ankit combines speed with accuracy — ensuring timely, credible, and insight-driven financial journalism that empowers both retail and institutional audiences.
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