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Foreign portfolio investors (FPIs) are moving money out of Indian equities as the artificial intelligence-led rally in the US and Asian markets such as South Korea and Taiwan attracts capital, NSE Managing Director and CEO Ashish Chauhan said, adding that he expects some of these funds to return to India when the current cycle fades.
Due to the AI story, the American market has risen from $25 trillion to about $75 trillion, similar seen in Korea and Taiwan, Chauhan said during an interaction with journalists after NSEs listing on the BSE. FPIs are fund managers who take out their money and go there for a cycle, and they do this often. Since they are foreigners, they can take out their money and cycle it, he added. Chauhan said the current AI-led cycle would eventually come to an end, which could bring foreign capital back to Indian equities. However, he stressed that this was his personal view on how he sees the market cycle. AI has reached its peak. When this cycle ends, this money will come back. However, this is just my opinion; this is how I see it, Chauhan said. The comments come against the backdrop of renewed FPI selling in Indian equities in September after foreign investors had turned net buyers in July and August. FPIs invested around Rs 11,045 crore in July and Rs 10,231 crore in August but withdrew Rs 23,676 crore through September 19, according to NSDL data. The selling followed a two-month buying streak and came amid global market uncertainty, higher US bond yields, elevated crude oil prices and currency pressures. NSDL data showed that FPIs were net sellers of Rs 4,521.96 crore in equities on September 25 alone, although they were net buyers on September 24. According to the Reserve Bank of India's (RBI) September Bulletin released on Friday, August saw continued FPI inflows, supported by the equity segment, even as the debt segment witnessed outflows. However, total FPI flows turned negative in September through September 21 after three consecutive months of inflows. The RBI attributed the reversal in September to the re-escalation of tensions in West Asia and rising global bond yields. During 2026-27 up to September 21, FPIs registered net outflows of USD 4.9 billion, driven by withdrawals from the equity segment. (ANI)
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