FPIs withdraw ₹25,000cr from Indian equities in March
What's the story
Continuing their selling spree in Indian equities, foreign portfolio investors (FPIs) have pulled out ₹24,753 crore worth of equities this month as of March 7. This brings the total outflow for the calendar year 2025 so far to ₹137,354 crore. However, the pace of selling has slightly slowed down in recent sessions, market experts said.
Investor insights
Market strategist observes shift in FPI behavior
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed a slight moderation in the trend of foreign institutional investors (FIIs) selling in India. However, cumulative FPI equity outflows for 2025 have already exceeded ₹1.30 lakh crore. This reflects a sustained risk-off sentiment among foreign investors. This slowdown in selling intensity could indicate stabilization in Indian equities if macroeconomic conditions improve.
Market trends
Chinese equities outperform Indian stocks, attracting FPI flows
The stellar performance of Chinese stocks has been a major reason for diverting FPI flows from India. "Chinese stocks have seen big buying triggered by attractive valuations and expectations from the recent positive initiatives by the Chinese government toward their big businesses," Vijayakumar said. The Hang Seng Index has posted a YTD return of 23.48%, significantly outperforming the -5% YTD return in Nifty.
Economic factors
Dollar index decline may influence future FPI movement
The recent decline in the Dollar index is tipped to limit the fund flows to the US, which might impact future FPI movement. Global uncertainties, including Donald Trump's tariff policies, have shifted investor focus toward domestic consumption-driven sectors like financials, telecom, aviation, and hotels as foreign-linked sectors remain volatile. Investors are cautious as they watch global factors and rely on the upcoming corporate earnings to find out whether foreign investor sentiment will turn favorable in the coming months.