Mumbai: Foreign Institutional Investors (FIIs) have net sold nearly ₹1 lakh crore worth of Indian equities since July, sparking concerns over market sentiment and the possibility of a trend reversal in the coming weeks.
Market data indicates that the sell-off, spread across sectors, comes at a time when global headwinds including higher US bond yields, oil price volatility, and uncertainty around central bank rate cuts are influencing investor behaviour. Analysts point out that some of the selling is also driven by profit-booking after a strong rally earlier this year.
Despite the sharp outflow, experts remain cautiously optimistic. They highlight that domestic institutional investors (DIIs) have stepped in to absorb much of the selling pressure, preventing a steeper fall in benchmark indices. Moreover, India’s underlying fundamentals — steady growth, tax reforms including GST rationalisation, and improving corporate earnings remain supportive.
Economists also suggest that once global risk appetite stabilises, FIIs may return to Indian equities, given the country’s long-term growth story. For now, the key factors to watch will be inflation trends, RBI’s stance on rates, and global liquidity flows.
