FPIs continue their selling streak in Indian markets, withdrawing ₹50,912 crore in January. Concerns over economic slowdown and corporate earnings weigh on investor sentiment.
Foreign Portfolio Investors (FPIs) have extended their selling streak in the Indian stock market to a 12th consecutive session, marking a continuation of the outflow trend that began in 2024. In January alone, FPIs have withdrawn ₹50,912 crore from Indian equities, highlighting concerns over India’s economic outlook and corporate earnings performance.
On January 21, 2025, FPIs offloaded equities worth ₹4,336 crore, further intensifying the downward pressure on Indian markets. As of now, FPIs have remained net sellers in every trading session of January, except for January 2, according to data from Trendlyne. This sustained selling has contributed to declines of nearly 2.5% in both the Nifty 50 and Sensex indices this month. Broader indices, including the Nifty Midcap 100 and Nifty Smallcap 100, have faced even steeper corrections, with losses exceeding 7% so far in January.
Concerns about the Indian economy’s slowdown and the weakening Q3FY25 earnings outlook have been major factors dampening investor sentiment. Analysts remain cautious about India Inc.’s performance in Q3, suggesting that earnings per share (EPS) downgrades, prevalent in the first half of FY25, could persist. Additionally, valuations in certain segments of the Indian market are seen as elevated, further discouraging inflows from foreign investors.
While global factors, such as the recent economic policies announced by US President Donald Trump, have added to uncertainty, analysts believe that India’s domestic economic recovery could eventually reverse the current trend. A potential improvement in corporate earnings, driven by stronger GDP growth fueled by resilient domestic consumption and government infrastructure spending, could help restore investor confidence.
The Reserve Bank of India‘s expected interest rate cuts might also create a more favorable borrowing environment, encouraging inflows into Indian assets. With US bonds becoming less attractive, FPI sentiment could shift positively in the near term if economic conditions improve. However, for now, the outlook remains cautious, with FPIs continuing their selling spree in India.
