Mumbai l January 17, 2026
Foreign institutional investors (FIIs) continued their selling streak in the Indian equity market, offloading a net ₹22,529 crore in the first half of January 2026, contributing to subdued performance on Dalal Street.
The sustained outflows come against a backdrop of relatively higher valuations and slower corporate earnings growth compared to other global markets. Capital appears to be rotating toward North Asian markets, which have attracted foreign inflows amid reform expectations and stronger relative performance.
Market experts indicate that FII selling pressure may persist until clear positive catalysts emerge. The Nifty 50 has declined approximately 1.5-1.7% year-to-date in January 2026, underperforming several peer indices.
Noted that 2025 saw limited market gains (Nifty return around 10%) despite robust domestic institutional investor (DII) buying of over ₹7.44 lakh crore, which offset FII outflows of ₹1.66 lakh crore. Key factors included weak earnings growth, elevated valuations, and uncertainty surrounding India-US trade discussions.
Analysts at HDFC Securities highlighted in their 2026 outlook that ongoing concerns over earnings and valuations have driven foreign capital toward North Asia. They anticipate potential opportunities for reversal later in the year if improving fundamentals and positive developments materialize.
While global equities remained broadly resilient, Indian benchmarks delivered flat weekly returns amid heightened Middle East tensions affecting oil prices, potential US tariff changes, and lingering India-US trade uncertainties. These factors have kept FIIs as net sellers.
Domestic sentiment remains supported by expectations of solid Q3 FY26 corporate results, which could provide the much-awaited positive trigger for renewed buying interest.
No official comments from regulatory bodies were available at the time of reporting.
