Foreign investors pull capital from Sri Lankan and Indian equity markets

Foreign investors have engaged in significant selling across South Asian equity markets. In Sri Lanka, a large exit from John Keells Holdings (JKH) drove the Colombo Stock Exchange into a net foreign outflow of LKR 94.2 million on October 1. The selling in JKH alone amounted to LKR 111.2 million, accounting for at least four-fifths of all foreign selling in the market for that session. Excluding JKH, foreign investors were net buyers of approximately LKR 17 million.

In India, foreign portfolio investors (FPIs) transitioned to net sellers in September, withdrawing Rs 35,860 crore from Indian equities. This trend continued into October 1, with an additional Rs 9,232 crore pulled from the market. Total FPI withdrawals from Indian equities for 2026 have reached approximately Rs 2.7 lakh crore. Analysts attribute these outflows to global factors, including elevated crude oil prices, high US bond yields, and a weak rupee, rather than domestic earnings performance.