FPIs continue to exit Indian markets, sold Rs 60,847 cr worth equities in April

Foreign investors continued their selling spree from Indian equities in April, pulling out Rs 60,847 crore from the market. This comes after a massive sell-off in March, when overseas investors had already offloaded shares worth Rs 1,17,775 crore, according to National Securities Depository Limited data. The back-to-back withdrawals have pushed cumulative foreign portfolio investor (FPI) outflows from Indian equities to Rs 1,91,969 crore in 2026 so far, signalling sustained weakness in overseas investor sentiment towards domestic markets. Market experts said the trend reflects a broader shift in global capital towards Asian economies seen as stronger beneficiaries of the ongoing artificial intelligence-led investment boom. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said investor appetite is increasingly being shaped by the AI trade, particularly in markets with large semiconductor and technology players. "An important factor driving capital flows is the AI trade, particularly in South Korea and Taiwan," he said. He said countries such as Japan, South Korea and Taiwan are drawing sizeable foreign inflows, while India and several other emerging markets are seeing capital move out as they contend with pressures including the energy crisis and weaker currencies. "A significant trend in FPI flows this year is that Japan, South Korea and Taiwan are attracting significant inflows while India and some other emerging markets, which are facing headwinds from the energy crisis and currency depreciation, are facing outflows," Vijayakumar noted. According to him, foreign investments are being concentrated in a small group of companies that are delivering strong returns and are closely tied to the AI growth story. "Two companies in South Korea - Samsung and SK Hynix - and one in Taiwan - TSMC - are attracting the lion's share of these inflows. The excellent results being posted by these companies are providing the fundamental support to the FPI flows into these markets," he added. Vijayakumar said India could continue to face FPI outflows as long as the global AI investment cycle remains the dominant market driver. "So long as the AI trade continues, the trend of FPI outflows from India is likely to continue," he said, while also cautioning that there are concerns about overvaluation in AI-related stocks.