Foreign Investors Continue Equity Sell-Off; FMCG Sector Sees Largest Outflows in Early 2026

India’s equity markets witnessed a sharp withdrawal of foreign capital at the start of 2026, underscoring investor caution amid high valuations. The FMCG sector, traditionally seen as a defensive bet, topped the sell-off list, reflecting concerns over stretched pricing and limited near-term growth triggers.

Key Highlights

Overall Outflows:

• FIIs withdrew ₹22,420 crore in the first half of January 2026.
• Selling was broad-based, impacting multiple sectors.

Sectoral Impact:

• FMCG: Largest outflows at ₹6,128 crore, driven by valuation concerns.
• Financial Services: Losses of ₹3,190 crore.
• IT Sector: Outflows worth ₹2,075 crore.

Bright Spot – Metals & Mining:

• Attracted ₹2,689 crore inflows, supported by strong gold and silver performance.
• One of the few sectors to buck the selling trend.

Investor Sentiment:

• Global investors remain cautious, preferring commodity-linked sectors over consumer-driven plays.
• High valuations in FMCG continue to deter fresh foreign buying.

Sources: The Economic Times, ScanX News, StockeZee Market Pulse