Foreign portfolio investors (FPIs) turned net sellers in Indian equities for the week ending May 22, 2026, withdrawing a net amount of ₹3,325.83 crore, as reported by the National Securities Depository Ltd (NSDL). The trading week was marked by divergent trends, with buying observed in the initial sessions followed by sustained selling in the latter part.
On Monday, May 18, FPIs recorded net purchases of ₹2,219.43 crore, which continued with net inflows of ₹2,168.78 crore on Tuesday, May 19. However, the sentiment shifted sharply from Wednesday onward. On May 20, FPIs became aggressive sellers, registering net outflows of ₹3,644.35 crore — the largest single-session outflow of the week. Selling continued on Thursday, May 21, at ₹2,278.61 crore, and moderated to ₹1,791.08 crore on Friday, May 22.
“The flow trend during the week was mixed. Foreign institutional investors were net buyers in the first two sessions but became aggressive sellers in the latter half amid weakening global sentiment,” said Himanshu Srivastava, Principal Analyst at Morningstar Investment Research India.
The downturn in the latter part of the week coincided with several adverse global developments. Brent crude prices remained high, fluctuating amid conflicting signals regarding US-Iran diplomatic negotiations. Additionally, the Indian rupee hit a new all-time low of ₹96.89 against the US dollar on May 20, contributing to foreign investor concerns. The downgrade of the US sovereign rating to Aa1 by Moody’s and consistently high US 10-year yields also dampened appetite for emerging markets throughout the week.
“The selling pressure was primarily driven by increased geopolitical uncertainty, concerns around Middle Eastern developments, elevated crude oil prices, and volatility in global bond yields. A stronger US dollar and uncertainty regarding future global interest rates additionally weighed on investor sentiment toward emerging markets, including India,” Srivastava added.
Despite the net outflows, selling activity slowed compared to the previous week, which had seen significantly greater outflows. “The moderation in outflows indicates that investors are becoming more selective rather than adopting a broad risk-off approach,” Srivastava observed.
On the domestic front, domestic institutional investors (DIIs) played a crucial role, recording net inflows of approximately ₹16,948 crore during the week. This effectively absorbed much of the foreign selling pressure and prevented a sharper correction in the market.
“Trends in institutional flows continue to highlight a growing divergence between foreign and domestic market participants,” said Dr. Ravi Singh, Chief Research Officer at Master Capital Services Ltd. “Ongoing domestic buying has been essential in absorbing FII-led selling pressure, helping to mitigate larger downward corrections amid heightened global uncertainty.”
In May thus far, FPIs have cumulatively sold ₹322.3 billion on a provisional basis, according to Pabitro Mukherjee, Associate Vice-President of Research at Bajaj Broking. “Looking ahead, institutional flows are expected to remain sensitive to developments surrounding US-Iran tensions and fluctuations in oil prices,” Mukherjee remarked.
“FIIs are likely to stay attuned to global liquidity conditions, geopolitical developments, and valuation comfort before becoming meaningfully bullish on Indian equities,” Srivastava concluded.
Published on May 23, 2026.
