FPIs pull out $3.95 billion from equities in January 2026.

5 Feb 2026 , 06:35 PM

Summary

FPIs were net sellers in Indian equities to the tune of $3.95 Billion in the month of January 2026. Metals and capital goods were the only two sectors that witnessed positive flows from FPIs. Most of the other sectors like BFSI, consumer goods, consumer services, FMCG, automobiles, and telecom saw heavy FPI selling in the month of January 2026.

The FPI selling of $3.95 Billion in January 2026 comes on top of $18.8 Billion of net selling in the year 2025. That is a tepid start to the new year. However, the month of January had seen peaking of event risks and that impacted FPI sentiments and turned them risk-off. However, with the Indo-US trade deal signed, things should hopefully change for FPI flows.

FPI SELLING – NOT A GREAT START TO 2026

Foreign Portfolio Investors (FPIs) continued to sell Indian equities aggressively in January 2026. After selling shares worth $18.8 billion in December 2025, they sold another $3.95 billion in January. This clearly shows a strong risk-averse mood among global investors.

Global geopolitical tensions played a big role in this selling. The delay in the Indo-US trade deal, along with rising US tensions involving Venezuela, Greenland, and Iran, pushed FPIs to reduce risk across emerging markets.

Domestic factors also added pressure. The weak Indian rupee, muted corporate earnings in Q3FY26, and high market valuations (with the Buffett ratio at around 125%–130%) made Indian equities less attractive to foreign investors.

As a result, India ended up being one of the worst-performing emerging markets in Asia during this period. The Indian rupee also ranked among the weakest currencies in the region, further discouraging foreign inflows.

HAVE THINGS CHANGED FOR FPIS IN FEBRUARY 2026?

To an extent, there have been some positive developments for FPIs over the last few days, with respect to investing in India. Here are a few pointers.

• The budget should be seen by the FPIs as a key positive for the Indian markets. It has a strong growth orientation and there has been substantial allocation by the government towards growth-oriented plans like PLI.
• Another major issue for FPIs was whether Indian fiscal deficit would spill over. The Union Budget has not only defended the fiscal deficit at 4.4% in FY26, but reduced it further to 4.3% in FY27. This is without sacrificing capex; with effective capex at 5.2% of GDP.
• The budget had another aspect, which would be appreciated by the FPIs. The budget also committed to target debt/GDP as a conscious strategy at 50% by 2030. For FY27, the debt/GDP is expected to come down from 56.5% to 55.6%.
• But above all, what the FPIs would truly savour would be the contours of the Indo-US trade deal. There is still a lack of clarity on the finer details, but that should be known in the next few days. If the deal can give a boost to Indian exports and boost Indo-US trade to a new high; that would be manna from heaven for the FPIs.

FPI AUC TAPERS IN JANUARY 2026

FPI equity AUC edged lower in January 2026. FPI equity AUC at $775 Billion and the overall AUC at $853 Billion are now way below the September 2024 peak AUC levels.

Industry Group	FPI AUC (Jan-26) ($ Billion)	FPI AUC (Dec-25) ($ Billion)
Financials (BFSI)	250.58	262.83
Automobiles and Auto Components	58.36	63.93
Information Technology (IT)	58.10	59.81
Oil & Gas	57.06	63.28
Healthcare and Pharmaceuticals	47.82	52.32
Capital Goods	45.89	46.26
Telecommunications	41.21	45.22
Fast Moving Consumer Goods (FMCG)	36.58	40.80
Metals and Mining	29.60	27.58
Consumer Services	29.33	32.80
Power (generation and transmission)	23.96	25.39
Consumer Durables	18.32	20.39
Services	16.57	18.24
Construction	14.03	15.21
Chemicals	13.49	14.54
Cement	12.79	12.82
Realty	12.09	14.11
Top 17 Sectors	765.67	815.53
Other 6 sectors	9.58	10.37
Total FPI AUC	775.35	825.90

Data Source: NSDL

These are the top 17 sectors with FPI AUC above $10 Billion as of January 2026. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.8% of total FPI equity AUC of $775.35 Billion. Here are the sectoral drivers of AUC change in January 2026?

The only sector with MOM accretion in AUC was; Metals (7.3%), while capital goods and cement were relatively flat. AUC depletion was visible in Realty (-14.3%), Consumer Services (-10.6%), FMCG (-10.3%), Consumer Durables (-10.2%), and Oil & Gas (-9.8%).

METALS AND CAPITAL GOODS LEAD FPI BUYING IN JAN-26

Here are the major sectors with positive FPI flows in January 2026.

FPI Net Buying in Sectors	H1-Jan-26 ($ Million)	H2-Jan-26 ($ Million)	Jan-26 ($ Million)
Metals & Mining	+298	+962	+1,260
Capital Goods	+36	+265	+301

Data Source: NSDL

Even in a month when the FPI selling was to the tune of $2.94 Billion, there were pockets of buying. Consumer services led by stocks like Eternal, Swiggy, and recently listed Meesho did managed to corner a lot of FPI attention. Metals was another key space. Year 2026 is likely to see a shift from precious metals to industrial metals and that rubbed off. Also, a recovery in China is raising hopes for metal stocks. Low crude oil prices around $60/bbl is boosting the gross refining margins (GRMs) as well as marketing margins for downstream. The surprise package in the month was the buying in IT, which saw a lot of year-end adjustment buying by the FPIs. However, FPIs sold nearly $8 billion of IT stocks in year 2025.

FINANCIALS AND CONSUMER STORIES TRIGGER SELL-SIDE STORY

Here is a sectoral break-up of FPI net outflows from Indian equities in January 2026.

FPI Net Selling in Sectors	H1-Jan-26 ($ Million)	H2-Jan-26 ($ Million)	Jan-26 ($ Million)
Financial Services (BFSI)	-354	-588	-942
Fast Moving Consumer Goods (FMCG)	-679	-149	-828
Healthcare	-116	-556	-672
Consumer Services	-216	-387	-603
Telecommunications	-166	-357	-523
Automobiles and Components	-55	-337	-392
Realty	-78	-213	-291

Data Source: NSDL

There were several major sell candidates in January 2026. Leading the pack was BFSI, with most FPIs paring stakes in private sector banks and NBFCs. FMCG once again took it on the chin as demand issues continue to haunt the sector, especially urban demand. ITC remains a major overhang for the FMCG sector. Healthcare has been facing pressure from pricing pressure in the US. In most of the other cases like telecom, auto, and realty; it was more about unwinding from higher levels after a strong rally in recent months.

KEY TAKEAWAYS FOR INVESTORS FROM THE JAN-FPI STORY

• In January 2026; even as FPIs sold equities worth $3.95 Billion, domestic institutions were net buyers of $7.52 Billion. Markets closed the month with gains.
• While the FPI flows did impact the rupee too, taking it closer to ₹92/$; the markets still held up for the month. Clearly, the domestic buying did the trick.
• Metals and Construction Material were the only two sectors to witness AUC (assets under custody accretion). It was depletion in case of all other sectors.
• On the positive side, FPIs showed a special liking for metal stocks amid a global shortage in metals amidst strong demand. In fact, FPIs have infused $1.26 Billion into metal stocks in the month of January 2026.
• FPI selling was a lot more prominent in consumer-oriented stocks like consumer goods, consumer services, fast moving consumer goods (FMCG), and automobiles. BFSI saw heavy selling; but that can be attributed to the high weightage it enjoys on the Nifty.