Investors have high expectations from the beginning of the new year, but the very first week of 2026 has alerted the stock market. In the first two trading days of January alone, foreign portfolio investors (FPIs) withdrew Rs 7608 crore from the Indian equity market. This sudden selling has created a slight panic in the market and questions are being raised whether the market will see more pressure in the coming days.
According to the data, this selloff has come at a time when there is uncertainty at the global level. Investors seem to be leaning towards safer options due to uncertainty over interest rates in the US and other developed economies, global trade tensions and geopolitical risks. For this reason, FPI withdrawal is being seen from emerging markets, especially India.
Heavy selloff in 2025
If we look at the last year, the picture becomes even clearer. In the year 2025, foreign investors had made a huge withdrawal of about Rs 1.66 lakh crore from the Indian stock market. The main reasons for this were weakness in the rupee against the dollar, fluctuations in global markets, concerns about America’s tariff policy and expensive valuations of Indian shares. Many foreign funds prioritized profit booking and reduced their stake to reduce risk.
pressure on rupee increases
The impact of continuous selling by FPIs was not limited to the stock market only, but pressure on the rupee also increased. During 2025, there was a decline of about 5 percent in the rupee against the dollar, in which the withdrawal of foreign investors is believed to play an important role. A weak rupee makes imports costlier and may also impact inflation, raising concerns among policymakers.
Hope remains in 2026
However, experts believe that the picture will not be completely negative in 2026. Market experts say that India’s domestic fundamentals are still strong.
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