FPIs pull ₹7,945cr from Indian equities, net outflows ₹1.4L crore
What's the story
Foreign Portfolio Investors (FPIs) have withdrawn ₹7,945 crore from Indian equities so far this month. The move is largely attributed to global uncertainties, including tariffs and ongoing geopolitical tensions. This comes after massive outflows of ₹34,990 crore in August and ₹17,700 crore in July. The total equity sell-off by FPIs in 2025 has now reached a whopping ₹1.38 lakh crore, data shows.
Future predictions
Moderation in the selling behavior
Looking ahead, market experts are keeping a close eye on upcoming macroeconomic data from India and the US, as well as tariff negotiations. These factors are expected to be key drivers of FPI flows in the coming week. Despite being net sellers in September with cumulative equity outflows of ₹7,945 crore till September 19, FPIs have shown some moderation in their selling behavior.
Market response
Fed's rate cut could improve global liquidity
After the US Federal Reserve cut interest rates by 25 basis points, FPIs briefly turned net buyers last week. They purchased equities worth ₹900 crore during this period. "For the current week, FPIs bought Indian equities worth ₹900 crore on the back of the Fed's rate cut," Vaqarjaved Khan, Senior Fundamental Analyst at Religare Broking Ltd., said. He added that two more cuts are projected in 2025, which could significantly improve liquidity in global markets.
Investor sentiment
Easing trade tensions between US and India
Himanshu Srivastava from Morningstar Investment Research India observed a "modest but noticeable return" of foreign investors to Indian equities last week. He attributed this to the Fed's dovish stance, easing US-India trade frictions, and India's stable macroeconomic outlook. However, he also warned that persistent global uncertainties and geopolitical risks continue to keep flows cautious.
Market strategy
Debt markets also witnessed FPI investment
V K Vijayakumar from Geojit Financial Services noted that FII selling in India has coincided with buying in other Asian markets like Hong Kong, Taiwan, and South Korea. This strategy has been profitable so far this year, but may change going forward. Meanwhile, debt markets have also witnessed investment with FPIs investing about ₹900 crore under the general limit and ₹1,100 crore through the voluntary retention route.