Foreign investors sell Rs 1,462 crore of shares on Monday

Foreign investors offloaded shares worth Rs 1,462 crore on Monday, 26 October, provisional exchange data showed, extending a long run of selling in the Indian stock market. Their net sales have reached $4.75 billion in October and a record $32.56 billion so far in 2026, according to the provisional data reported on Tuesday.

The selling came on a day when Indian shares rebounded. The Sensex and Nifty rose 0.7 per cent on Monday, ending a four-session losing streak, as gains in select stocks after quarterly results lifted sentiment. At the pre-open on Tuesday, the Nifty rose 0.2 per cent while the Sensex rose 0.16 per cent, even as oil stayed elevated despite a pullback.

The contrast between foreign selling and a rising market points to the role of domestic buyers. Domestic institutional investors bought shares worth Rs 2,609 crore on Monday, according to exchange data, and their buying has cushioned the market through much of the foreign selling this year. Domestic fund inflows, including systematic investment plan money, have absorbed a large part of the shares sold by foreign investors.

Foreign investors drive record FPI outflows in 2026

FPI outflows in 2026 have now passed the total for the whole of 2025 by a wide margin, and the October figure alone is larger than the September total reported in earlier depository data. Foreign investors had put money into Indian equities in July and August, but that buying has been more than reversed by the selling since September.

India's limited exposure to the artificial intelligence boom has been cited as a key factor behind the sustained foreign outflows, contributing to the Nifty 50 underperformance against emerging market peers. Foreign investors have directed money towards markets seen as closer to the AI trade, while Indian shares, which have fewer large AI-linked names, have missed part of that flow.

High crude oil prices have added to the pressure. Brent crude traded near 115 dollars a barrel, and for an oil-importing country such as India, higher energy costs raise inflation risks and widen the import bill. Elevated United States interest rates have also kept American assets attractive for global funds, which reduces the pull of emerging market equities when risks rise.

Domestic buying cushions foreign investors selling

Domestic investors have been the main counterweight to the selling. Their purchases on Monday, worth Rs 2,609 crore, followed a pattern seen through October, in which local institutions bought while foreign funds sold. That buying has kept index falls smaller than the scale of foreign selling alone might have produced.

The balance between the two groups matters for the near term. If domestic buying stays strong, the market can absorb further foreign sales without a sharp fall. If domestic buying slows at the same time as foreign investors keep selling, the cushion thins and index moves can turn sharper. Traders therefore watch daily flow data from both groups as closely as index levels.

The United States Federal Reserve is widely expected to keep interest rates unchanged on Wednesday before raising them again in December, according to the Tuesday pre-open report. The Fed decision, and any signal about December, will shape global fund flows. A clear signal could either calm markets or push more money towards dollar assets, depending on how traders read it.

For now, the flow picture is clear for the stock market. Foreign investors sold Rs 1,462 crore of Indian shares on Monday, their October net sales stand at $4.75 billion, and their 2026 net sales have reached a record $32.56 billion, while domestic investors bought Rs 2,609 crore on the same day.