Foreign portfolio investors ended a two-month buying streak in September, selling Indian equities worth Rs 256.62 billion (about Rs 25,662 crore or $2.7 billion), their highest monthly outflow in six months, as rising oil prices and elevated bond yields eroded the appeal of Indian assets.

The Nifty 50 and Sensex each fell about 5.7 percent in September. FPI outflows for 2026 reached $26.75 billion as of September 29, according to National Securities Depository data, putting foreign investors on track for record annual withdrawals.

The selling was driven by global factors rather than India-specific concerns. Brent crude surged above $105 per barrel amid US-Iran tensions, while the US 10-year Treasury yield crossed 5 percent after a 25-basis-point Federal Reserve rate hike. FPIs also shifted capital towards AI-heavy markets such as South Korea and Taiwan.

The primary market held up better, with FPI investment in IPOs and fresh issuances continuing through the month. July and August had seen net FPI buying of Rs 20,200 crore and Rs 29,630 crore respectively.