FPIs Withdraw Rs 12,569 Cr in Nov: What's Driving the Sell-Off?

New Delhi, Nov 9 (PTI) After a brief pause in October, foreign portfolio investors have resumed selling, pulling out a net Rs 12,569 crore from Indian equities so far in November amid weak global cues and risk-off sentiment.

This follows a net inflow of Rs 14,610 crore in October, which had come after consecutive months of outflows -- Rs 23,885 crore in September, Rs 34,990 crore in August, and Rs 17,700 crore in July, according to data from depositories.

The renewed selling trend, which has continued on every trading day of November so far, has contributed to India's underperformance compared with other major markets this year, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He noted that a key feature of FPI activity in 2025 has been the divergence in flows, with hedge funds selling in India while buying in markets perceived as beneficiaries of the AI-driven rally, such as the US, China, South Korea, and Taiwan.

"India is currently being viewed as an AI-underperformer, and that perception is shaping FPI strategy," he explained.

However, Vijayakumar added that AI-linked valuations are now stretched, and the risk of a potential bubble in global tech stocks could limit sustained selling in India.

"If this realisation strengthens and India's earnings growth continues to improve, FPIs may gradually turn buyers again," he said.

Echoing a similar view, Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, said FPIs sold Indian equities worth Rs 12,569 crore in the first week of November amid a global sell-off in technology stocks across Asia and other major markets.

India Inc's Q2 FY26 results have been marginally better than expected, especially in the midcap segment, but global headwinds may keep foreign investors cautious toward riskier assets in the near term.

"Flows could turn positive in select sectors and stocks as the earnings season progresses," Khan said.

So far in 2025, FPIs have withdrawn over Rs 1.5 lakh crore.

Meanwhile, in the debt market, FPIs withdrew Rs 1,758 crore under the general limit while investing Rs 1,416 crore through the voluntary retention route during the period under review.