Foreign Investor Outflows Weigh Heavily on Indonesian Financials in May: Sector-wise Breakdown Reveals Buying and Selling Trends

Foreign Portfolio Investors Continue to Sell Indian Equities Amid Global Uncertainty

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.

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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.

However, experts believe that FPIs may turn buyers, infusing some optimism into the market, depending on crude oil prices and stability in the rupee. Q4 earnings have been encouraging so far, but 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.

The sectors witnessing the highest FPI selling during May 1-15 were Financial Services, with foreign investors pulling out ₹17,960 crore, followed by Oil, Gas & Consumable Fuels, which saw outflows of ₹6,885 crore, NSDL data showed. Other sectors that witnessed significant outflows included Telecommunication, Information Technology, Fast Moving Consumer Goods (FMCG), and Construction Materials.

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.

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