FIIs net sold Rs 1 lakh crore in Indian equities since July; trend reversal ahead: Analysts
Foreign investors, known as FIIs, have been dumping Indian stocks big time. Since July, they’ve sold over Rs 1 lakh crore worth, shaking up market moods. But don’t worry—steady buying from local players, or DIIs, has kept things afloat, as per fresh data from stock exchanges.
This big sell-off comes from weak company earnings, sky-high stock prices, and worries about US tariffs. It’s left major indices like Sensex and Nifty stuck in a tight range, not zooming up or crashing down.
From July 1 to September 8, FIIs offloaded Rs 1.02 lakh crore in equities. In the first six days of September alone, they sold Rs 7,800 crore. And it didn’t stop there—up to September 13, sales hit Rs 11,169 crore, according to NSDL figures.
Looking ahead, experts like VK Vijayakumar, Chief Investment Strategist at Geojit Investments, predict FIIs might ease up on selling or even start buying. Why? Signs of an Indian stock market turnaround, thanks to repo rate cuts by the RBI and GST reforms that could boost the economy.
This year, FIIs have net sold Rs 2.18 lakh crore so far. On the flip side, DIIs stepped in with massive net buys of Rs 5.37 lakh crore. They’ve been reliable buyers in the cash market every month since August 2023, acting like a safety net for Indian markets.
What sparked this FII outflow? Single-digit growth in corporate earnings played a huge role. Plus, small and mid-cap stocks stayed overvalued in August, while big blue-chips edged closer to their fair long-term prices.
“Higher valuations in India compared to cheaper spots like China, Hong Kong, and South Korea pushed FIIs to sell here and scoop up bargains elsewhere,” Vijayakumar explained. “It’s paid off this year—these markets have crushed India’s performance.”
But there’s good news on the horizon. India’s GDP bounced back strong in the first quarter. Reforms like budget tax cuts, MPC rate reductions, and GST tweaks could keep the growth engine running.
Earnings might grow modestly at 8-10% in FY26, but analysts see a solid 15%+ jump in FY27. That could flip FII sentiment and bring fresh foreign money into Indian stocks. Keep an eye on these shifts—they’re key for anyone tracking stock market trends in India.
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