Foreigners sold, Indians bought: who is holding up the market in 2026

By 17 October, foreign portfolio investors (FPIs) had pulled a net ₹3.12 lakh crore out of Indian shares in 2026, nearly double the ₹1.66 lakh crore of all 2025. The Nifty is down about 14% for the year. Someone is buying. Our earlier explainer covered why foreigners are leaving. This one asks who catches what they sell.

The other side of the trade

Domestic institutional investors (DIIs), meaning mutual funds, insurers and pension funds, have bought far more than foreigners have sold.

So far in 2026, DIIs have put in ₹6.83 lakh crore, about 2.2 times the foreign selling of ₹3.08 lakh crore (FIN2DAY calculation). That is a big reason the market has fallen but not collapsed. The latest weekly data, to 17 October, puts foreign selling at ₹3.12 lakh crore. The small difference is the extra days of October selling.

Most of the damage was done early. Net flows from July to 17 October add up to about −₹0.38 lakh crore, which leaves roughly ₹2.74 lakh crore, almost 88% of the year's outflow, for January to June (FIN2DAY calculation, approximate because the totals are rounded).

Where the domestic money comes from

The answer is ordinary savers. Monthly SIP contributions hit a record ₹32,490 crore in September, up from ₹32,297 crore in August, with about 63 lakh new SIPs registered. Equity mutual fund schemes took in ₹38,307 crore in September, 31% more than August.

This steady flow is not free of strain. Total mutual fund assets fell to ₹82.64 lakh crore on 30 September from ₹87.08 lakh crore a month earlier, a drop of 5.1%, in a month when debt funds also saw net outflows of ₹1.83 lakh crore.

Foreigners sell shares but still buy IPOs

The headline number hides a split. According to NSDL data to 12 October, FPIs net sold ₹3.64 lakh crore of shares on exchanges but net bought about ₹0.56 lakh crore in the primary market, which covers IPOs and share sales.

The Jio Platforms IPO shows the same pattern. Of its 212 anchor investors, 85 were global funds, including sovereign and government-backed investors. See our Jio IPO explainer.

What changed in October

On 16 October, FPIs were net buyers, ending a 15-session selling run, according to provisional data. Geojit's V K Vijayakumar linked the pause to the US 10-year yield easing from above 5.3% to 5.08% and a firmer rupee. Choice Wealth's Dheeraj Gaur called it "tactical rather than indicative of a structural shift". FPIs kept selling financial services and oil-related stocks while buying consumer services such as digital platforms, restaurants and healthcare services.

What to watch

• US yieldsThe easing from 5.3% helped. A reversal would put pressure back on.
• Crude oilHigh prices hurt India's import bill and the rupee. Analysts are watching Brent and US–Iran relations.
• SIP resilienceDomestic buying can only keep up if monthly SIP inflows hold as markets stay weak.
• Q2 earningsResults for July–September decide whether Indian valuations look fair to foreign investors.

Educational content only, not investment advice.