Foreign portfolio investors (FPIs) turned net sellers in Indian equities for the week ended May 22, 2026, withdrawing a net ₹3,325.83 crore, according to data from the National Securities Depository Ltd (NSDL). The week, however, was sharply divided — buying in the first two sessions gave way to sustained selling in the final three.
On Monday, May 18, were net buyers to the tune of ₹2,219.43 crore, followed by net inflows of ₹2,168.78 crore on Tuesday, May 19. The trend reversed sharply from Wednesday onward. On May 20, FPIs turned aggressive sellers, recording net outflows of ₹3,644.35 crore — the steepest single-session outflow of the week. Selling continued on Thursday, May 21, at ₹2,278.61 crore, before moderating to ₹1,791.08 crore on Friday, May 22.
“The flow trend during the week was mixed in nature. FIIs were net buyers during the first two trading sessions, before turning aggressive sellers in the latter half of the week amid weakening global sentiment,” said Himanshu Srivastava, Principal Analyst, Morningstar Investment Research India.
The reversal in the latter half of the week coincided with a clutch of adverse global developments. Brent crude prices remained elevated, hovering in a wide range amid conflicting signals on US–Iran diplomatic negotiations. The Indian rupee touched a fresh all-time low of ₹96.89 against the US dollar on May 20, adding to pressure on foreign investor sentiment. Meanwhile, a Moody’s downgrade of the US sovereign rating to Aa1 and US 10-year yields staying elevated kept emerging market risk appetite constrained through the week.
“The selling pressure was largely driven by heightened geopolitical uncertainty, concerns around developments in the Middle East, firmness in crude oil prices, and volatility in global bond yields. A relatively stronger US dollar and uncertainty surrounding the future path of global interest rates also continued to weigh on investor sentiment toward emerging markets, including India,” Srivastava added.
Despite the net outflows, the pace of selling moderated compared to the previous week, which had witnessed significantly higher net outflows. “The moderation in the pace of outflows indicates that investors are gradually becoming more selective rather than adopting a broad-based risk-off approach,” Srivastava noted.
On the domestic front, domestic institutional investors (DIIs) acted as a significant counterweight, recording net inflows of approximately ₹16,948 crore during the week, effectively absorbing a large share of the foreign selling pressure and preventing a sharper market correction.
“Institutional flow trends continue to highlight the widening divergence between foreign and domestic market participants,” said Dr. Ravi Singh, Chief Research Officer, Master Capital Services Ltd. “Persistent domestic buying has played a crucial role in absorbing FII-led selling pressure and preventing sharper downside corrections in the broader market structure amid elevated global uncertainty.”
In May so far, FPIs have cumulatively sold ₹322.3 billion on a provisional basis, according to Pabitro Mukherjee, Associate Vice-President – Research, Bajaj Broking. “Looking ahead, institutional flows are likely to remain sensitive to developments around US–Iran tensions and oil price movement,” Mukherjee said.
“FIIs are likely to remain sensitive to global liquidity conditions, geopolitical developments, and valuation comfort, before turning meaningfully constructive on Indian equities,” Srivastava said.