Foreign Investors Pull ₹45,125 Crore From Indian Stocks in Six Sessions
The selloff by Foreign Institutional Investors (FIIs) has sharply intensified, with a net outflow of ₹45,125 crore from Indian equities in the first six sessions of October alone. This figure nearly matches the entire outflow for September. According to Geojit Investments, total FII equity selling in 2026 has now reached a record ₹3,60,952 crore. The primary driver for the exodus is the surge in US bond yields, with the 10-year Treasury yield climbing above 5.3% to its highest level since 2002. This makes risk-free US government debt more attractive than emerging market equities.
What this means
This isn't just a minor portfolio adjustment; it's a significant capital flight driven by basic math. When investors can get a guaranteed 5.3% return from the US government, the risk premium for holding Indian stocks has to be much higher to be worthwhile. This sustained selling puts direct pressure on the rupee and keeps a lid on stock market gains, even when domestic fundamentals look strong. For banks, this trend has a dual impact: it creates a tougher environment for their treasury and investment banking arms, and the resulting currency volatility complicates risk management for their corporate clients. The selling is unlikely to reverse until US yields stabilise or Indian equity valuations become too cheap for foreign investors to ignore.
Most affected: Stock markets and the Rupee
Key takeaway: Expect continued pressure on the Nifty and the rupee as long as US 10-year bond yields remain above the 5% mark.
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