Foreign institutional investors have accelerated their exit from the domestic capital market, disposing of equities worth Rs 45,125 crore across the first six trading sessions of October. This sharp divestment almost matches the entire outflow seen in September, when global funds pulled out Rs 45,536 crore. Overseas investors have now posted net negative positions in domestic shares for eleven consecutive trading sessions starting from mid-September.
Despite a volatile period that ended an eight-week decline for the domestic stock market, overseas capital has moved out continuously. Total equity sales by foreign portfolio investors in 2026 have expanded to Rs 3,60,952 crore. Market commentators attribute the decline in the Nifty index, which has recorded negative returns of 13.87 percent so far in 2026, primarily to this persistent institutional selling.
The ongoing reallocation of global capital stems from surging interest rates in Western debt markets. Yields on 10-year US Treasuries climbed past 5.3 percent, surpassing their 2007 peak and reaching levels last observed in early 2002. Furthermore, 30-year US yields scaled 5.6 percent, driven by the largest quarterly jump seen in the 21st century during the three months through September.
Higher risk-free returns on US government debt above 5.2 percent have lessened the appeal of emerging market shares. Market observers note that the current downward trend over the past two months reflects dual pressures from high US interest rates and expensive crude oil. These pressures are expected to weigh on market sentiment until equity valuations adjust to create a more attractive risk profile.
Market participants are evaluating potential technical levels for domestic benchmark indices alongside macro developments. Analysts pinpoint immediate downside support for the Nifty between 22,350 and 22,330, warning that a drop below this threshold could push the index down to 22,200. Conversely, an upward threshold is identified at 22,660 to 22,680, matching the 10-day exponential moving average, where a breakout might push the index toward 22,820.
In the coming days, market tracking will focus on several global and domestic macro variables. Market watchers will closely follow upcoming inflation metrics from India and the United States, movement in US sovereign bond yields, fluctuations in Brent crude benchmark prices, and geopolitical updates involving US-Iran relations.
Key numbers
- October foreign equity sales: Rs 45,125 crore
- 2026 total FPI equity outflows: Rs 3,60,952 crore
- 2026 Nifty performance: -13.87%
- 10-year US Treasury yield peak: >5.3%
- 30-year US Treasury yield peak: 5.6%
What a board might note
- How does the year-to-date Nifty decline of 13.87 percent influence corporate treasury strategy for ongoing share repurchases or planned capital raises?
- Does the escalation of 10-year US Treasury yields above 5.3 percent alter the cost of capital or refinancing assumptions for international debt instruments?
- How might potential shifts in crude oil prices impact input cost forecasts and operating margin projections for the coming quarters?
Source: Economic Times, 11 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
