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India Financial Sector Sees Reduced Investor Sell-Off
5 Jun
Summary
- Global investors sold ₹5,181 crore of Indian financial services equity in late May.
- Metals sector attracted nearly 60% of foreign inflows, totaling ₹4,999 crore.
- Overall FPI equity outflows in 2026 have surpassed the entire previous year's total.
Global investors curbed their divestment from India's financial services sector in the latter half of May 2026. Foreign portfolio investors (FPIs) sold equity valued at ₹5,181 crore, a marked decrease from the ₹17,000 crore sold in the first half of the month. This reduction in selling pace offers a temporary reprieve for the sector, which saw substantial outflows earlier in the year.
Despite the overall trend of foreign investors reducing exposure in financial services, the metals sector stood out, attracting approximately 60% of total inflows during the latter half of May, amounting to ₹4,999 crore. This inflow into metals contrasts sharply with the outflows seen in other sectors.
Year-to-date, FPIs have offloaded equities worth ₹2.6 lakh crore up to June 03, 2026, a figure that already surpasses the total outflow of ₹1.7 lakh crore for the entirety of 2025. Factors such as AI disruption and inflationary pressures from elevated oil prices are contributing to this sustained selling pressure. The cumulative net foreign investment in Indian equities has reached its lowest point in 12 years.
