Foreign institutional investors sold ₹34,469 crore in equities as of May 28 2026, according to NSDL data.

This is the fourth month of sell-off in Indian equities in the calendar year, with the third consecutive one beginning in March 2026.

As of May 2026, foreign investors have pulled out a total of ₹2.26 lakh crore, which makes the five-month period among the worst ever. So far, the highest outflow in a month was ₹1.17 akh crore in March 2026. Outflows ebbed to ₹60,847 crore in April 2026.

India’s dwindling preference as a market among FPIs is visible with the returns of MSCI Emerging Markets Index with Nifty 50.

The MSCI Emerging Market Index, which is a benchmark for many foreign investors with financial interest in the emerging economies, consistently performed better than Nifty 50 in the past five months. Investors in Indian market received negative returns in four of the past five months, but the MSCI index had negative returns in just three of them.

The March 2026 loss was at 13.3% for MSCI Emerging Market Index, more than the 11.3% of Nifty 50, but the former rebounded completely in April 2026, returning 14.5% and maintaining the momentum. India, however, has not regained this momentum.  In April 2026, Nifty 50 return was 7.5%, but this was much lesser than the 11.31% in March 2026. 

“Poor earnings growth in India, much better earnings growth and prospects for earnings growth in other markets, high bond yields, particularly in the U.S., and continuous rupee depreciation and fears of further depreciation are the reasons behind the sell-off,” said V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. 

Until these reasons fade, a meaningful FPI rebound is not likely, Mr. Vijayakumar added.