The biggest discussion in the Indian stock market at the moment is that Foreign Institutional Investors (FIIs) are continuously selling Indian shares, yet the market is not seeing the same big decline as was seen earlier. Usually, when foreign investors withdraw money from the Indian market, there is huge pressure on Sensex and Nifty because FIIs invest huge amounts but this time the situation seems a little different. So far in 2026, foreign investors have withdrawn more than Rs 2 lakh crore from the Indian market. Despite this, the Indian market did not weaken completely. Even on May 16, 2026, there were fluctuations in the market but Nifty remained around 24,900 and there was no major panic in the market.
The biggest reason for this is believed to be that now the Indian market is no longer dependent only on foreign money. Domestic investors are continuously investing money in the stock market. Every month thousands of crores of rupees are coming into the market through SIP i.e. Systematic Investment Plan. Along with this, the number of retail investors has also increased rapidly. This is the reason why the Indian market is managing itself even after selling shares by foreign investors.
Also read: Don’t be afraid of market crash, SIP will be of big benefit even in the fall.
Who are FIIs after all?
If understood in simple language, these are big foreign investors. This includes the world’s big funds, pension funds, insurance companies and hedge funds which invest money in the stock markets of different countries. When they invest money in the Indian market, the market rises because a large amount of money comes into the market, but when they withdraw money, the pressure on the market increases. Earlier the Indian stock market used to be largely dependent on foreign money. For this reason, the impact of FII sales was very visible.
Domestic investors become the new force
Today Indian investors have started controlling the market themselves. This is the biggest reason that despite FII selling, the market is not collapsing completely. The number of people investing in India has increased rapidly in the last few years. Lakhs of new demat accounts have been opened and now even people from small towns are investing money in the stock market and mutual funds. Demat account means an account in which shares are held digitally. Earlier people used to keep shares in paper but now everything has become online.
Continuous support of SIP market
This means investing a fixed amount every month. Like a person invests Rs 1000 or Rs 5000 in a mutual fund every month. The biggest thing is that whether the SIP market goes up or down, it keeps moving continuously. People keep investing money every month. This continuous influx of money strengthens the market. According to reports, investment of more than Rs 30 thousand crore came through SIP in April 2026.
Small cap and mid cap
Small cap means shares of small companies and mid cap means shares of medium companies. More growth is seen in these companies, hence many investors expect higher returns here. According to a Reuters report, record investment was seen in small cap and mid cap mutual funds in April 2026. Experts are also saying that many shares have become very expensive and there may be a correction in future. Correction means a sudden fall in the prices of shares.
Also read: Is the economy heading towards recession? ‘Bond yield curve’ already gives signals
Indian market is changing
Domestic investors, SIP investments and retail participation have become the new forces in the market. This is the reason why despite continuous selling by FIIs, the Indian market does not seem to be completely exhausted. The influence of foreign investors on the market is still huge, but now the power of domestic investors in the Indian market has increased more than ever.
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