FPI equities selling in June 2026 escalates to $(5.21) Billion

FPI SELLING AT $(27.7) BILLION IN LAST 4 MONTHS

It briefly looked like FPI selling was tapering, after it had fallen to $(3.44) billion in May 2026. However, June saw FPI selling once again escalate to $(5.21) billion. Out of the 23 sectors, 10 sectors saw net buying, while 13 sectors saw net selling in June. Net selling was dominated by Oil & Gas, Autos, Mining & Metals, and IT; while BFSI saw net buying after months of heavy selling. FPIs have now sold close $64 billion of equities since the peak of September 2024, of which nearly $28 billion of selling happened in last 4 months of calendar 2026. FPI AUC is now sharply lower since the peaks of September 2024.

Data Source: NSDL

PUTTING THE JUNE 2026 FPI SELLING IN PERSPECTIVE

• From a longer-term perspective, the FPI net selling of $64 billion since Sep-24, has resulted in the FPI equity AUC falling -22.0% from $931 billion to $726 billion. Overall FPI AUC (including debt) fell from $1,007 billion to $806 billion in this period.

• Market sentiments improved in the second half after the RBI policy allowed easier ECB borrowings at concessional hedging costs, and FCNR(B) deposits with full hedge cost borne by RBI. This led to rupee stability as FPIs turned net buyers in H2-JUN26.

• FPI flows into debt in June 2026 exceeded equity outflows by $500 million. This was after RBI expanded the Fully Accessible Route (FAR) list for FPIs. Any interest earned on debt by FPIs and LTCG on sale of bonds were made tax-free, to boost inflows.

SECTORAL COLOUR OF FPI FLOWS IN JUNE 2026

Sectoral FPI flow patterns have been consistent; but BFSI saw net buying in June.

• At $(1.40) billion, FPI selling in oil & gas continued to increase. Markets are still wary of how long it may take for normalcy to be restored in the Straits of Hormuz.

• Automobiles saw net selling of $(1.10) billion as supply chain constraints continued to hit the profitability of the auto sector, amid sharply rising input costs.

• Metals & Mining and IT saw combined FPI selling of $(1.75) billion. While Metals fell after a sharp rally, IT continues to be under pressure on Palantir disruption fears.

• FPIs continue to bet on a slowing of the capex cycle revival as they net sold $(1.09) billion in the power sector and the capital goods sector combined.

• Consumer facing sectors like FMCG and Healthcare also saw net selling of $(908) million in June 2026 as FPIs expect purchasing power recovery to be muted.

• What about the buy-side story? Three sectors accounted for $968 million of net buying, which was focused in the second half of June. BFSI saw buying interest on hopes that rate hikes may be put off, while construction stocks saw good demand. Like in May, transport/logistic service stocks continued to see FPI interest.

While the FPI selling slowed in H2-JUN26, it remains to be seen if the correction in AI and Chip stocks globally, results in FPI monies coming back to India. That is not too certain!