Foreign Portfolio Investors (FPIs) maintained a strong selling stance in Indian equities during the first half of April 2026, unloading stocks valued at ₹48,141 crore. According to NSDL data, the financial services sector bore the brunt of these outflows, with investors selling stocks worth ₹19,152 crore, followed by consumer services at ₹5,338 crore and healthcare at ₹4,481 crore. Additional sectors experiencing significant outflows included automobiles and auto components (₹3,704 crore), oil & gas (₹3,352 crore), and FMCG (₹2,976 crore).
Selling pressure was observed across multiple sectors, with telecom experiencing outflows of ₹2,492 crore, real estate at ₹1,917 crore, IT at ₹1,325 crore, and construction at ₹1,273 crore. As reported by LiveMint, only a few sectors saw slight inflows, including power (₹601 crore) and utilities, indicating selective buying amidst the overall downturn. This widespread selling reflects a risk-averse attitude among foreign investors during this period.
According to NSDL data, foreign portfolio investors had divested Indian stocks amounting to ₹1,17,775 crore in March, with the financial services sector witnessing the largest impact from these outflows at ₹60,655 crore, representing more than 50% of overall outflows. Experts attribute the ongoing selling to the energy crisis caused by the conflict in West Asia, along with potential repercussions for the Indian economy and the ongoing decline of the rupee. Other markets like South Korea and Taiwan are viewed as more appealing from the FPI standpoint, as they are projected to deliver significantly better earnings growth compared to modest growth anticipated in India for FY27. The significant drop in the market following the start of the war has resulted in fair valuations, though they are not yet considered compelling buying opportunities according to analysts.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, explained that financial stocks account for the major part of FPI's assets under custody, so when they are in sell mode they sell stocks which are liquid and easy to sell. He highlighted that last year was mainly a year of AI trade, with AI stocks delivering superior returns, and India being an AI laggard couldn't benefit from this. The superior performance of markets like South Korea and Taiwan was driven by impressive earnings growth of AI stocks in these markets, with these markets continuing to perform well supported by expectations of excellent earnings growth of AI stocks. Vijayakumar noted that dumping of financial stocks by FPIs has made their valuations attractive, presenting a buying opportunity for long-term investors.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that global equity markets continue to be driven largely by news flows around the West Asian conflict and related negotiations, leading to sharp divergence in returns across geographies. He expects FPI flows to remain volatile in the near term, given India's entry into Q4FY26 earnings season with expectations of marginal-to-modest growth, and macro factors including March CPI inflation at 3.4% year-on-year and goods exports declining 7.4% YoY to $38.9 billion. The significant drop in the market following the start of the war has resulted in fair valuations, though they are not yet considered compelling buying opportunities according to analysts.
