Foreign Portfolio Investors (FPIs) kept offloading Indian shares in June by selling off assets worth Rs 49,340 crore ($5.16 billion) due to ongoing global uncertainties, rising yields on U.S. bonds, and valuation worries in the domestic market. The current outflow has taken FPI withdrawals in 2026 up to Rs 2.7 lakh crore, which is more than the total outflows of the year 2025 till now.
Key Highlights
- Foreign portfolio investors withdrew Rs 49,340 crore from Indian equities in June amid global uncertainty and valuation concerns.
- Despite equity outflows, FPIs invested over Rs 24,800 crore in India's debt market during June.
The data recorded in the depositories showed that foreign investors continued to sell in June but at a slightly reduced rate as geopolitical worries eased after advances in peace talks between the United States and Iran over crude oil prices and progress in the talks. Increased risk sentiment in the rest of the world helped to temper withdrawals but it was not enough to reverse the heavy selling earlier in the month, analysts said.
Also Read: Foreign Investors Pump $2.68 Bn into Indian Debt Market
Global Risks and Valuation Concerns Weigh on Sentiment
It was attributed to a number of reasons such as the premium valuation of Indian equities, preference for developed markets and higher US Treasury yields among the market experts.
The moderation in FPI selling towards the end of June was also attributed to the stabilisation of the rupee and profit booking activities in some of the markets in Asia, analysts said.
Foreign investors bucked the trend in the debt market in India, though there were robust equity outflows. This marks the 12th consecutive month that FPIs have had confidence in India's fixed-income market, with a total investment of Rs 21,652 crore through the Fully Accessible Route (FAR) and another Rs 3,246 crore through the Voluntary Retention Route (VRR) in June.
In a bid to lure foreign capital, the government has introduced a number of measures in June, such as concessional rates for hedging support to FCNR deposits, an expanded forex swap window, increased forex investment limits for NRIs and Overseas Citizens of India in domestic equities, and increased availability of government securities under the FAR scheme.
