NEW DELHI: Foreign portfolio investors (FPIs) have withdrawn Rs 44,166 crore from Indian equities so far in October, taking their total outflows in 2026 to more than Rs 3 lakh crore, as elevated crude oil prices, a stronger US dollar and high US bond yields weigh on investor sentiment.Foreign investors are also shifting funds towards North Asian markets, attracted by the rally in artificial intelligence-related stocks.The latest outflows follow net withdrawals of Rs 35,861 crore in September. FPIs had invested Rs 20,200 crore in Indian equities in July and Rs 29,631 crore in August, according to data from the National Securities Depository Ltd (NSDL).With the latest selling, FPI withdrawals from Indian equities have reached Rs 3.04 lakh crore in 2026, significantly higher than the Rs 1.66 lakh crore withdrawn during the whole of 2025, the data showed.Vedant Gupte, co-founder and CEO of investment platform Trackk, said the selling should be seen as a global shift in capital allocation rather than a negative assessment of India’s investment prospects.“Crude prices staying elevated on Gulf supply risk, a firmer dollar and US yields pulling money back to safer ground, and FPIs chasing the AI rally in North Asian markets where valuations currently look cheaper,” he told PTI.Gupte said these factors did not point to India-specific weakness but reflected a shift towards markets where the global economic outlook appeared more favourable.“We remain constructive on the medium-term outlook because domestic flows have absorbed this selling without the market cracking, which tells you the floor is sturdier than the headline outflow number suggests,” he added.VK Vijayakumar, chief investment strategist at Geojit Investments Ltd, said heavy FPI selling was the primary reason for the Indian market’s underperformance this year. The Nifty has delivered negative returns of 13.87% year-to-date in 2026, he said.Vijayakumar said withdrawing funds from India was a rational decision for foreign investors when the risk-free return on 10-year US government bonds was above 5.2%.“So, as long as the US bond yields remain elevated, FPIs will continue to sell. The scenario will change when the valuations become attractive, and the risk-reward ratio turns favourable for investment,” he said.He added that the market had been on a downward trend over the past two months, with high crude oil prices and elevated US bond yields acting as major headwinds.Foreign investors also withdrew funds from India’s debt market in September. They pulled out Rs 1,921 crore through the Fully Accessible Route (FAR) and Rs 233 crore through the Voluntary Retention Route (VRR). However, they invested Rs 4,729 crore through the general route, according to the data.