Foreign investors dump Rs 35,860 crore of Indian stocks in September as rupee sinks and Nifty slides

Foreign portfolio investors dumped Indian equities worth Rs 35,860 crore in September, NSDL data shows, turning net sellers again after buying Rs 20,200 crore in July and Rs 29,631 crore in August. It was the heaviest monthly outflow since the election-season sell-off in the spring.

The September exit takes total FPI withdrawals from Indian equities in 2026 to Rs 2.69 lakh crore - already well past the Rs 1.66 lakh crore pulled out in all of 2025, and a record for a calendar year.

Analysts point to a familiar cocktail: elevated crude prices on Hormuz-related supply risks, higher US bond yields, a weak rupee and a rotation of global capital toward AI-led North Asian markets after China's late-year stimulus. 'This is a global allocation story, not a domestic earnings one,' said Rajesh Singla of Alpha AMC - though domestic mutual fund SIPs are absorbing much of the selling.

The damage is visible on Dalal Street. The Nifty 50 is down more than 14% in 2026, on course for its first annual decline in 15 years, and has fallen for eight straight weeks - its longest losing streak in 25 years. The rupee, meanwhile, has touched multiple record lows, becoming one of Asia's worst-performing currencies.

The selling is not confined to equities: FPIs also pulled Rs 5,247 crore from general-limit debt, Rs 5,049 crore via the voluntary retention route and Rs 10,431 crore via the fully accessible route in September.