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Indian Equities Fall 9.1% in 2026 as Foreign Outflows Reach $10.5 Billion: BofA Report

Indian equities have recorded a 9.1% decline in US dollar terms year-to-date in 2026, lagging behind global and regional peers while witnessing significant capital outflows, according to data from Bank of America (BofA) Global Investment Strategy and Bloomberg.

What Happened

Data compiled up to August 19, 2026, shows a distinct divergence across international financial markets. While several global markets posted double-digit advances, Indian equities registered a drop of 9.1% in US dollar terms. During the same timeframe, Chinese equities also experienced weakness, declining by 8.1%.

In contrast, other Asian equity markets delivered strong returns. South Korean equities surged by 77.6%, and Taiwanese equities gained 58.0%. Japanese equities also advanced, posting an 18.0% increase. Across broader regions, emerging-market equities overall were up 20.6%, US stocks rose 13.3%, UK equities gained 12.4%, and European markets increased by 12.2%.

This underperformance in India has coincided with sustained portfolio withdrawals. On a year-to-date basis, India saw $10.5 billion in equity outflows. In contrast, developed markets attracted heavy capital, with US equities drawing $433.6 billion and Japan securing $21.6 billion in inflows. Emerging markets as a broader group witnessed $45.3 billion in cumulative outflows year-to-date.

Key Highlights

  • Indian Stock Performance: Equities fell 9.1% year-to-date in US dollar terms as of August 19, 2026.
  • Regional Contrast: Korea (+77.6%), Taiwan (+58.0%), and Japan (+18.0%) outperformed, while China dropped 8.1%.
  • Foreign Capital Movement: India recorded $10.5 billion in year-to-date equity outflows, whereas the US gathered $433.6 billion and Japan received $21.6 billion.
  • Broader Asset Trends: Brent crude climbed 50.6%, WTI crude rose 49.5%, the overall commodities basket jumped 63.4%, industrial metals advanced 13.8%, and gold gained 3.4%.
  • Weekly Flow Pattern: Total global equity inflows stood at $40.1 billion during the latest reported week, while emerging markets experienced $0.4 billion in weekly outflows.
  • Investor Sentiment: A BofA poll indicated that India replaced Indonesia as Asia’s least-preferred market.

Why This Matters

The figures indicate that the decline in Indian equities is occurring in an environment where global investors continue to allocate heavily to equities overall. The persistent outflows of $10.5 billion from India demonstrate that capital has favored developed markets like the United States and Japan, along with specific export-oriented Asian equity markets such as South Korea and Taiwan, rather than a broad-based retreat from global risk assets.

What to Watch Next

Market observers will be monitoring whether emerging-market funds continue their weekly redemptions, which totaled $0.4 billion in the most recent reading, and how ongoing price movements in crude oil—with Brent up over 50% year-to-date—impact overall asset allocation across emerging economies.

Frequently Asked Questions

How did Indian equities perform compared to other Asian markets in 2026?

Indian equities declined by 9.1% in dollar terms as of August 19, 2026. By comparison, South Korea gained 77.6%, Taiwan advanced 58.0%, and Japan rose 18.0%. China was also lower, falling 8.1%.

How much capital has flowed out of Indian equities in 2026?

According to BofA figures, India registered $10.5 billion in equity outflows on a year-to-date basis through mid-August 2026.

Which asset classes performed best globally in 2026?

Energy and commodities led returns, with the broad commodities basket gaining 63.4%, Brent crude advancing 50.6%, and WTI crude rising 49.5%, followed by significant gains in Korean and Taiwanese equities.

Source: Based on market data from BofA Global Investment Strategy and Bloomberg, as reported by Business Today.