- Foreign institutional investors returned to buying Indian equities in November after heavy October selling
- FIIs sold $2.2 billion in October, with technology and telecom still attracting foreign inflows
- Domestic investors bought $6.3 billion in October, marking 39 months of continuous inflows
After months of persistent selling, foreign institutional investors (FIIs) have finally returned to buying Indian equities in November. However, the shift comes after heavy selling in October, which took the cumulative outflows in 2026 to a record $30.4 billion.
Even in October, foreign investors were not selling across the board. Technology and telecom stocks continued to attract inflows, while financials, FMCG and automobiles bore the brunt of the selling, according to Motilal Oswal research analysts Deven Mistry and Aanshul Agarawal.
FIIs sold $2.2 billion worth of Indian equities in October, following the sharp sell-off in September. However, the pace of outflows was lower than the previous month, with FII activity recovering in the second half of October.
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Domestic institutional investors (DIIs), meanwhile, continued to buy Indian equities, recording net inflows of $6.3 billion during the month. Their buying momentum extended to the 39th consecutive month.
Technology, Telecom Attract FII Buying
Technology was the most preferred sector among foreign investors in October, attracting inflows of $1.4 billion. Telecom followed with inflows of $700 million.
On the other hand, FMCG and financial services saw outflows of $1 billion each, while automobiles saw foreign investors withdraw $800 million.
Overall, 14 of the 20 sectors tracked by Motilal Oswal recorded net FII outflows in October.
Financials Bear The Brunt Of FII Selling In 2026
The pattern is more pronounced in the year-to-date data. FIIs have sold a record $30.4 billion worth of Indian equities in 2026, with financial services accounting for the largest share of outflows at $13.2 billion.
Automobiles and FMCG followed, with outflows of $4.9 billion and $4.5 billion, respectively. Oil and gas also witnessed outflows of $4.4 billion.
On the flipside, services attracted the highest FII inflows at $1.4 billion, followed by metals at $1.3 billion and capital goods at $1.1 billion.
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Analysts highlighted that services had emerged as the most preferred sector among FIIs in 2026, while financials remained the least preferred. This reflects a shift from 2025, when telecom attracted the highest inflows of $5.5 billion, while technology saw the largest outflows of $8.6 billion.
The brokerage also pointed out that FMCG and oil and gas witnessed FII outflows in nearly every month of 2026 so far, while technology and telecom recorded an increase in foreign buying.
Is FII Selling Losing Steam?
Volatility in FII flows, which has been a key overhang for Indian markets, appears to be easing, analysts said.
The brokerage said India's macroeconomic fundamentals, corporate earnings, correction in valuations from their 2024 peak levels and domestic liquidity is likely to support a revival in foreign investor interest.
It added that any moderation in the global AI trade could encourage FIIs to increase exposure to emerging markets such as India.
A continued improvement in FII sentiment, along with easing geopolitical concerns, may help offset the factors that have weighed on Indian equities over the past two years, the brokerage said.
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