Foreign Selling of Indian Stocks Slows to Rs 8,991 Crore for the Week as Nifty Gains 2.8%

India's 2026 foreign-selling problem eased this past week, though it did not stop. Foreign portfolio outflows narrowed to Rs 8,991 crore for the week ended Friday, Oct. 16, according to Ravi Singh, Chief Research Officer at Master Capital Services. Domestic institutions bought roughly Rs 7,813 crore of shares over the same stretch.

The benchmarks responded. The Nifty 50 gained 2.77% for the week and the Sensex rose 3.11%.

The week in numbers

On Friday the Sensex added 413.66 points, or 0.56%, to close at 74,729.27. The Nifty rose 148.80 points, or 0.65%, to 23,146.15. Both indices posted a second straight daily gain.

For the week, the Sensex gained 2,256.94 points and the Nifty added 625.7 points.

That is a sharp swing from Monday, Oct. 12. That session saw the Sensex trading at 71,711.89 and the Nifty at 22,319.50 in the afternoon, and BSE-listed companies' market value fell by nearly Rs 14.73 lakh crore at one point. Both indices were down nearly 14% for 2026 at that stage, India Today reported.

The prior week had also ended higher, snapping an eight-week losing streak amid short-covering and value buying, NDTV Profit reported.

What drove the rebound

Singh and other analysts credit IT stocks, easing global bond-yield pressure and steady domestic institutional buying. Singh attributed the interest in Indian IT services to a shift in global investor positioning after a sell-off in international AI and semiconductor stocks.

Ajit Mishra, SVP of Research at Religare Broking, said global markets are in a transition phase. "Major central banks, including the US Federal Reserve, have started moving towards an easier monetary policy stance, while growth remains subdued across regions such as Europe and China," he said.

A caution: one week of narrower selling is not a change in the year's direction. FPIs had pulled Rs 44,166 crore from Indian equities in October as of the Oct. 12 data, according to National Securities Depository Ltd figures. That took 2026 net outflows to Rs 3.04 lakh crore, against Rs 1.66 lakh crore for all of 2025.

The skeptics on the rally

The analysts quoted are not calling a bottom. Their shared concern is that the gains are narrow.

Vinod Nair, Head of Research at Geojit Investments, said the sustainability of the recovery "will hinge on earnings growth broadening beyond IT, with revenue and margin delivery across financials, consumption and industrials under close scrutiny."

Ponmudi R, CEO of Enrich Money, told PTI that investors will watch whether the rally broadens beyond IT and whether the indices can hold gains above immediate resistance levels.

The same sources point to pressures that have not gone away: high crude prices, geopolitical uncertainty in the Middle East, global bond-market moves and domestic inflation concerns. Heading into the week of Oct. 12, Brent crude futures were at $102.97 a barrel and US West Texas Intermediate at $90.08. Higher crude can fuel inflation, Singh noted, and rising bond yields can make fixed income more attractive relative to equities.

India Today's earlier analysis tied the foreign exit to high US bond yields, expensive oil and a weaker rupee. The rupee will also be on investors' radar this week, analysts told PTI.

Bank results are in, more earnings are coming

Three large lenders have already reported September-quarter numbers, with uneven growth:

• HDFC Bank, India's largest private lender, posted a 5.55% rise in consolidated net profit to Rs 20,700 crore. The bank said treasury operations restricted profit growth.
• ICICI Bank reported consolidated net profit of Rs 16,333.18 crore, up 22.28% from Rs 13,357.06 crore a year earlier.
• Axis Bank reported net profit up 39.4% to Rs 7,704.67 crore for the second quarter of 2026-27, helped by higher core income and improved asset quality.

The calendar stays busy. Bajaj Finance, UltraTech Cement, Hindustan Zinc, Union Bank of India, IREDA, Infosys, Coforge, Crisil and Swiggy are scheduled to announce results in the week ahead.

IT is the sector carrying the rally, so the Infosys and Coforge numbers will test the strongest part of the recovery directly.

The week ahead is short

Indian stock markets will be closed Tuesday, Oct. 20, for Dussehra, making it a holiday-shortened week.

It is not yet clear whether foreign investors will keep trimming sales. The weekly Rs 8,991 crore outflow is smaller than recent weeks, but it is still net selling. Domestic buying of about Rs 7,813 crore covered most of it, not all.

For a recovery to hold, the next set of data would need to show foreign outflows narrowing again and earnings strength reaching banks, consumer companies and industrials. The next weekly flow figures will show which way that goes.