Global funds sell net 24.3 bln rupees of India equities prior trading day: NSDL

Global funds sell net 24.3 bln rupees of India equities prior trading day: NSDL

Global Funds Turn Net Sellers of Indian Equities Amid Volatility

According to the latest data, global funds recorded a net outflow of ₹24.3 billion ($298 million) from Indian equities on the prior trading day, marking a reversal in foreign investment trends. This contrasts with earlier reports of net inflows in February 2026, such as the ₹19,675 crore ($2.43 billion) purchase in mid-February, highlighting the sector's sensitivity to macroeconomic shifts.

The recent outflow aligns with broader uncertainties affecting global capital flows. While India's economic reforms and demographic advantages have historically attracted long-term capital, short-term volatility—driven by factors like currency fluctuations and geopolitical risks—continues to influence investor behavior. For instance, the rupee's stabilization in February initially spurred inflows, but renewed concerns over U.S. tariff policies and global risk-off sentiment may have prompted caution.

Analysts note that foreign institutional investors (FIIs) remain pivotal to India's equity market dynamics. In 2025, FIIs sold ₹1.5 trillion in Indian stocks, the largest annual outflow in recent history, due to stretched valuations, a weak rupee, and shifting global capital preferences. However, the India-U.S. trade deal in February 2026 temporarily restored confidence by reducing tariffs on key exports, triggering a two-week inflow of ₹19,675 crore. The recent reversal suggests that these gains may be fragile.

Domestic institutional investors (DIIs), including mutual funds and pension funds, have increasingly offset FII volatility. DIIs now own 24.8% of Nifty 50 stocks, compared to FIIs' 24.3%, reflecting a structural shift in market ownership. This trend, driven by sustained systematic investment plan (SIP) inflows, provides a stabilizing effect even during periods of foreign outflows.

While the ₹24.3 billion outflow underscores short-term jitters, long-term fundamentals—such as India's fiscal reforms and corporate governance improvements—remain intact. Investors are advised to monitor upcoming corporate earnings and global policy developments for clarity on the market's trajectory.

(https://www.ainvest.com/news/global-funds-buy-net-44-0-bln-rupees-india-equities-prior-trading-day-nsd-2602/): National Securities Depository Limited (NSDL)
(https://sahi.com/blogs/fi-is-are-back-what-19-000-crore-in-foreign-buying-means-for-indian-retail-investors): Sahi.com Blog Analysis