FPIs pull out over ₹5,520cr from Indian equities in July
What's the story
Foreign Portfolio Investors (FPIs) have turned net sellers in July, withdrawing ₹5,524 crore from Indian equities so far. The withdrawal comes after three months of sustained investments and is largely attributed to ongoing trade tensions between the US and India, as well as mixed corporate earnings results. This has taken the total outflow for 2025 to ₹83,245 crore, data from depositories showed.
Market predictions
Investment trend so far this year
The latest withdrawal follows a net investment of ₹14,590 crore in June, ₹19,860 crore in May, and ₹4,223 crore in April. Prior to this period of investment, FPIs had withdrawn ₹3,973 crore in March, ₹34,574 crore in February and a massive ₹78,027 crore in January. Going forward, the trend of FPI flows will depend on US-India trade talks and corporate earnings performance.
Investor sentiment
Resolution of trade disputes could restore confidence
Himanshu Srivastava, Associate Director at Morningstar Investment Research India, said the resolution of trade disputes and recovery in earnings could restore investor confidence and lure FPIs back to Indian markets. He added, "While elevated market valuations prompted FPIs to reassess the attractiveness of Indian equities, ongoing trade tensions, especially between the US and India, and concerns over US interest rate policies contributed to a cautious investment outlook."
Others
Debt market investments
Srivastava also noted that mixed corporate earnings have raised concerns about the sustainability of corporate profitability. Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, echoed similar sentiments saying that global markets and macro developments along with India's result season led to the outflow. Despite these challenges in equity markets, FPIs did invest ₹1,850 crore in debt general limit and ₹1,050 crore in debt voluntary retention route during this period.