FIIs offload ₹22,530cr worth of domestic stocks this month
What's the story
Foreign institutional investors (FIIs) have continued their selling spree in the Indian stock market, offloading domestic equities worth ₹22,530 crore in the first half of January. The trend intensified during a holiday-shortened week with foreign investors selling shares worth ₹14,266 crore in just four sessions. Ajit Mishra from Religare Broking attributed the continued FII selling to tariff-related uncertainties and geopolitical tensions, that have overshadowed optimism over better-than-expected Q3 earnings by some large-cap IT companies.
Market impact
FIIs' selling trend continues into January
The selling trend by FIIs has continued into January, after a net sale of domestic shares worth ₹22,611 crore in December. This brings the total outflows for 2025 to ₹1,66,286 crore. In Q3 alone, FIIs sold shares worth ₹11,766 crore after offloading shares worth ₹76,619 crore in the third quarter of CY25.
Market analysis
Elevated valuations and AI trade influence FII behavior
Market expert V K Vijayakumar has pointed out elevated valuations in India and AI trade as major reasons for the FII exodus last year. The sustained selling by FIIs also led to a sharp depreciation of the Indian rupee against the US dollar, he said.
Investment strategy
Strategic market moves amid FII outflows
Mishra has advised investors to be cautious with leverage and position sizes in light of the mixed domestic and global backdrop along with continued foreign fund outflows. He also suggested that a decisive break from the current consolidation range would give cues for the next directional move on Nifty. Mishra recommended focusing on quality large-cap and larger midcap stocks, especially in sectors with strong earnings visibility and institutional interest such as IT, metals, and select PSU names.