Foreign portfolio investors (FPIs) have begun 2026 on a cautious footing, continuing their selling trend from last year by withdrawing Rs 7,608 crore from Indian equities in the first two trading sessions of January, according to market data. The outflow reflects lingering global uncertainties and investor risk aversion at the start of the year.

The early-January selling comes after a massive net outflow of about Rs 1.66 lakh crore in 2025, driven by volatile currency movements, global trade tensions, fears of potential US tariffs and stretched equity valuations. Sustained FPI selling last year also contributed to nearly a 5 per cent depreciation of the rupee against the US dollar.

Market experts, however, see scope for improvement in the months ahead. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said 2026 could witness a shift in FPI strategy as India’s strong GDP growth outlook and expectations of a recovery in corporate earnings may attract foreign capital.

Angel One Senior Fundamental Analyst Vaqarjaved Khan said easing equity valuations, potential normalisation in India-US trade relations, a benign global interest rate environment and stability in the USD-INR pair could support a revival in FPI inflows.

Data from NSDL shows that FPIs pulled out Rs 7,608 crore between January 1 and 2. Analysts noted that January typically sees cautious foreign investment behaviour, with outflows recorded in eight of the past ten years, keeping flows highly sensitive to global cues.