Foreign institutional investors (FIIs) remained net sellers for the sixth consecutive week, offloading a net ₹11,490 crore from Indian equities, according to exchange data. Domestic institutional investors (DIIs), however, continued to act as a counterweight, logging net purchases of ₹16,398 crore during the same period and cushioning the broader market decline.

Month-to-Date Scorecard

On a month-to-date basis through 26 September 2026, FIIs have net sold ₹18,531 crore worth of Indian equities, while DIIs have net bought ₹52,617 crore — a stark divergence that underlines the growing role of domestic capital in providing market stability. Despite this DII buffer, the Nifty50 has declined 3.90 per cent from its August-end close of 24,080.40.

One-Month Trend: FII Selling vs DII Support

Over the past month, FIIs were net sellers in every single week, while DIIs remained consistent net buyers throughout. According to Pabitro Mukherjee, Deputy Vice President – Research at Bajaj Broking, this sustained divergence has limited the Nifty's slide to 4.91 per cent, from a high of 24,334.55 down to 23,140.50. Notably, this marks one of the most persistent bouts of foreign selling seen in recent quarters, with no single week of FII net buying in the past month.

Friday's Market Session

Markets witnessed a volatile session on Friday, eventually ending with modest gains and a partial recovery from the sharp sell-off of the prior session. After a marginally positive open, benchmark indices oscillated within a narrow range before settling — the Nifty50 closed at 23,140.50 while the Sensex ended at 73,895.74, up 0.43 per cent. Analysts noted that oversold positions in sectoral heavyweights provided some bottom-up support and helped limit further downside.

Key Macro Triggers to Watch

The recovery remained measured as investors continued to monitor elevated global yields, sticky crude oil prices, and persistent foreign selling pressure. Brent crude, trading near $105–106 a barrel, remains too elevated to offer meaningful macroeconomic relief for India, a major oil importer. Market participants noted that progress in US–Iran negotiations could ease the geopolitical risk premium embedded in oil prices, while any renewed escalation or supply disruption could intensify inflationary pressures further. In the coming week, market direction is likely to be shaped by Brent crude movements, US–Iran geopolitical developments, and the release of US Q2 GDP data.

Outlook

If FII selling persists and global headwinds continue, Indian markets are likely to remain volatile in the near term. However, steady DII buying is broadly expected to continue limiting the downside. The key question for the weeks ahead is whether domestic institutional firepower remains sufficient to absorb sustained foreign outflows — a dynamic that has so far prevented a sharper correction but has not eliminated it.