Foreign portfolio investors have withdrawn Rs 48,056 crore from Indian equities so far in October, extending a selling streak that has made 2026 the heaviest year on record for foreign outflows from the Indian stock market, according to depository data reported by multiple outlets.

The October figure, based on data from the Central Depository Services Ltd (CDSL), takes cumulative foreign outflows from Indian equities in 2026 to about Rs 3.08 lakh crore. That is nearly double the Rs 1.66 lakh crore withdrawn during the whole of 2025.

A reversal after two months of buying

October reversed a brief period of foreign buying. Investors had put Rs 20,200 crore into Indian shares in July and Rs 29,631 crore in August, as hopes of an easing of the West Asia conflict briefly improved sentiment. Those inflows have now been more than reversed, with net withdrawals of Rs 35,861 crore in September followed by the larger October outflow so far. October's month-to-date figure is already about a third higher than September's full-month total.

Analysts point to a familiar set of pressures behind the selling. Brent crude has traded around $114 to $117 a barrel amid tensions in West Asia, raising costs for India, which imports most of its crude oil. Weak corporate earnings, inflation concerns, elevated United States interest rates and uncertainty over the earnings outlook have also weighed on sentiment, with some analysts noting that the large Jio Platforms share sale temporarily absorbed market liquidity as well.

Selling eased in the final week

There are signs the pace of selling is moderating. In the week ended October 23, foreign investors turned net buyers on two of the five trading days, and the weekly outflow narrowed. V K Vijayakumar of Geojit Investments pointed to three reasons for the easing: lower US bond yields, a stronger rupee earlier in the week, and large-cap valuations that now look more reasonable after months of decline.

Domestic buyers have helped absorb much of the foreign selling. Domestic institutional investors bought Rs 10,942 crore in the latest week, according to reported data, while steady systematic investment plan flows from retail investors have also provided support. Even so, Indian benchmarks fell in the holiday-shortened week, with the Nifty closing near 22,600 after a 2.4 percent weekly drop and mid- and small-cap indices suffering sharper losses of roughly 5.6 percent and 7.3 percent respectively.

What investors watch next

Market watchers say it is too early to call the easing a turning point. Brent crude settled at $116.91 on Friday after fresh attacks on tankers in the Strait of Hormuz, and the rupee's rally has stalled. If oil stays this high, the improvement could reverse quickly, analysts caution.

Attention now turns to central bank decisions in the United States and Japan, US economic data, crude prices and India's earnings season. Those will help decide whether foreign investors return to Indian equities or keep trimming their exposure into the final months of the year.