FII Selling Eases in October 2026 as Technology and Telecom See Inflows: Motilal Oswal

Foreign institutional investors (FIIs) remained net sellers of Indian equities in October 2026, recording net outflows of $2.2 billion. However, this selling pressure was lower compared to the figures recorded in September, according to a report by Motilal Oswal Financial Services.

FII activity showed a notable recovery during the second half of October, bringing in net inflows of $2.8 billion. This followed significant outflows of $5 billion during the first half of the month. Meanwhile, domestic institutional investors (DIIs) recorded net inflows of $6.3 billion during October, extending their continuous buying streak to 39 consecutive months.

Sector-wise, technology attracted the highest FII inflows in October at $1.4 billion, followed by telecom with inflows of $700 million. Conversely, FMCG and financial services each recorded outflows of $1 billion during the month, while automobiles experienced outflows of $800 million. Overall, 14 out of 20 sectors recorded net FII outflows in October.

For the calendar year 2026 so far (CY26YTD), FIIs have sold Indian equities worth approximately $30.4 billion, the report stated. Within this year-to-date period, financial services witnessed the highest outflows at $13.2 billion, followed by automobiles at $4.9 billion and FMCG at $4.5 billion. On the other hand, services attracted the highest inflows at $1.4 billion, followed by metals at $1.3 billion and capital goods at $1.1 billion.

Motilal Oswal noted that FII volatility, which remains a key overhang for Indian markets, appeared to be easing. The brokerage highlighted that healthy macroeconomic fundamentals, strong corporate earnings, a correction in valuations from their 2024 peak levels, and robust domestic liquidity could support a stronger revival in foreign investor interest going forward.

The report added that an improvement in overall FII sentiment, alongside easing geopolitical challenges, could help offset market headwinds and lay the groundwork for a sustained rally.

"The easing of FII selling pressure in the second half of October, coupled with sustained domestic institutional buying, demonstrates the underlying resilience of the Indian market. While sectors like technology and telecom are regaining foreign interest, the broader macroeconomic fundamentals and robust domestic liquidity remain crucial pillars for long-term stability and investor confidence." — Dr. Shishir Gupta, Founder & CEO, StartupLanes