Foreign Investors Sold ₹35,861 Crore in September. Domestic Institutions Bought More.

Foreign portfolio investors (FPIs) were net sellers of Indian equities worth ₹35,861 crore in September 2026, according to depository data, after net buying of ₹20,199 crore in July and ₹29,631 crore in August.^{1, 2} Over the same month, domestic institutional investors (DIIs) bought about ₹76,030 crore of shares on exchanges, according to provisional NSE data.³ The money leaving and the money arriving did not match in size, and the gap is the story.

Two numbers for the same selling

You will see FPI selling reported as both ₹35,861 crore and ₹45,537 crore. Both are correct, and they measure different things.

• ₹45,537 crore is FPI net selling on stock exchanges.¹
• ₹9,676 crore came in through the primary market (IPOs and similar issues).¹
• ₹35,861 crore is the net equity outflow after adding the two, which is the figure depository data reports.^{1, 2}

The difference is a calculation I can verify: 45,537 minus 9,676 is 35,861.

A reversal, not a trend

July and August had brought foreign inflows, reportedly on expectations of lower crude prices.³ One market strategist quoted by PTI called those inflows a temporary phenomenon, and September reversed them.³ Selling picked up pace through the month: ₹14,116 crore in the first fortnight and ₹21,745 crore in the second.²

The Nifty fell 6.43% in September and the Sensex 6.19%.⁴ September's FPI outflow was the largest since April 2026, and NSDL data put FPI equity outflows for 2026 so far at about ₹2.6 lakh crore, against about ₹1.66 lakh crore in all of 2025.⁴

Over April to September, FPI equity flows were about negative ₹1.29 lakh crore, while debt routes combined were about positive ₹43,927 crore.² Foreign money has been leaving equities this year, with a pause in July and August.

What they sold, and what they bought

Sector data from NSDL shows 14 of 23 sectors saw net selling in September.²

• Most sold: financial services (about ₹13,147 crore), oil, gas and consumable fuels (₹6,854 crore) and automobiles (₹6,212 crore).²
• Net bought: consumer services (₹2,333 crore), services (₹2,302 crore), healthcare (₹2,117 crore) and construction (₹1,311 crore).²

Financial services is also the largest FPI holding, at about $208.5 billion, roughly 30% of the $689.4 billion of equity assets foreign investors hold in custody (30 September 2026). A sale there moves the total.² Note that custody values reflect price and exchange-rate changes as well as flows.

Why they sold

Reasons cited in the reports include rising US bond yields (the 10-year above 5.2%, touching 5.29% on 1 October), concern that crude oil may stay high for longer, a monsoon about 13% below normal, and wider geopolitical uncertainty including the US-Iran conflict and US tariffs on buyers of Russian crude.^{3, 4} Rate-hike expectations were also cited.⁴ One strategist said markets had logged eight consecutive weekly losses.³ These are the explanations market participants gave. The data does not prove which one mattered most.

Who bought

DIIs (mutual funds, insurers and other domestic institutions) bought about ₹76,030 crore in September on provisional exchange data, more than the ₹45,537 crore FPIs sold on exchanges.³ Another report, published on 30 September before the month closed, put DII September buying at ₹64,759 crore.⁵ The difference is most likely timing, but I have not confirmed that, so treat "about ₹65,000 to ₹76,000 crore" as the honest range.

The longer pattern is clearer. DIIs have been net buyers for 38 consecutive months, with cumulative inflows of about ₹20.2 lakh crore since August 2023.⁵ Monthly SIP contributions of about ₹30,000 crore are a steady source of that money.⁵ By the June 2026 quarter, DIIs owned about 21% of Nifty 500 companies, against about 17% for FIIs, a new low for foreign holdings.⁵

What it means, carefully

Domestic buying has absorbed foreign selling before, and it did in September. That cushions the market. It does not decide the outcome: eight weekly losses show prices still fell. Domestic flows are also driven by monthly investor contributions, which can slow if markets fall for long.

What to watch: whether FPIs stay net sellers through October, whether US yields keep rising, and whether DII buying holds near the September level.

This is analysis of reported flows, not investment advice.

Note: figures are as reported in early October 2026 and may be revised. Reports differ on some September totals; the differences are explained in the text.