FPIs withdraw ₹3,100cr from Indian markets amid year-end selling
What's the story
Foreign portfolio investors (FPIs) pulled out ₹3,141.56 crore from Indian markets on Friday. The withdrawal marks a continuation of their selling spree in the last trading week of 2025. The trend is largely attributed to currency concerns and valuation worries that have been affecting market sentiment. The outflow on December 26 included ₹1,556.99 crore from equities and ₹1,584.68 crore from debt markets, data from the National Securities Depository Limited (NSDL) showed.
Market activity
FPIs's equity and debt market transactions
In the equity segment, FPIs sold shares worth ₹6,891.44 crore via stock exchanges while buying ₹5,334.45 crore. This resulted in net sales of ₹1,556.99 crore through the secondary market. Primary market investments added a marginal ₹194.99 crore to offset some exchange-based outflows. The week was volatile for foreign investors after a strong start with robust inflows of ₹1,883.64 crore on Monday mainly due to equity investments of ₹2,167.34 crore.
Investor sentiment
Market fluctuations and sentiment
The market's momentum reversed sharply on Tuesday with net outflows of ₹1,512.12 crore, followed by week's steepest withdrawal of ₹3,362.31 crore on Wednesday. The markets remained closed on Thursday for Christmas and Friday's session recorded an outflow of ₹3,141.56 crore bringing the week's net withdrawal to ₹8,015.99 crore across four trading days. Abhishek Goenka, Founder and CIO of Billionz attributed this trend to uncertainty around trade deals and its impact on the Rupee which is Asia's worst-performing currency this year.
Market trends
Debt markets and hybrid instruments
The debt markets witnessed a steady selling spree throughout the week. On Friday alone, outflows were seen across all categories in the debt segment: ₹312.55 crore from the general limit, ₹508.09 crore from Voluntary Retention Route (VRR), and ₹728.65 crore from Fully Accessible Route (FAR). Hybrid instruments also saw net sales of ₹45.70 crore while mutual funds saw marginal inflows of ₹10.42 crore on Friday alone.
Market analysis
Year-end FII selling and market impact
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, emphasized the scale of this year's outflows. "In December up to 27th, FIIs have sold equity for ₹22,130 crore through the exchanges," he said. He added that "this takes the total FII selling in CY 2025 to ₹2,31,990 crore." The sustained selling is in stark contrast to 2024 when FPIs sold ₹1,21,210 crore through exchanges but recorded net positive flows for the year due to investments in primary markets.