In the latest sign of weakness, Foreign Portfolio Investors (FPIs) have pulled out Rs 555 crore from Indian equities in July up to the 11th, according to NSDL data. This marks the first monthly outflow after three straight months of positive inflows in April, May, and June.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “There are signs of FPI inflows weakening. After three months of positive inflows, FPI has turned negative, though marginally, so far in July.”
He attributed the latest trend to the earlier heavy selloff in January and February, and said, “The first three months of this year, FPI inflows were negative and this trend was reversed in the next three months.”
Despite selling on the secondary markets, FPIs remained active in the primary market. “An important trend in FPI investment is that FPIs have been consistent buyers/investors in the primary market even when they have been selling through the exchanges,” Vijayakumar added.
Explaining the outflows in July, he said, “FPI selling in July after three months of buying can be attributed to the recovery in the market from the March lows and the consequent elevated valuations. Since other markets are cheaper relative to India, FIIs may again sell and move money to cheaper markets as a short-term strategy.”In the broader global context, India has not been a top performer among emerging markets. “In H1 2025, the Indian market underperformed most markets, including the MSCI EM Index,” he noted.Also read: TCS, Bharti Airtel, among 78 stocks approaching record dates for dividends, bonus issue, stock splits
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