In the first fortnight of January, foreign institutional investors (FIIs) have sold about Rs 22,530 crore from the Indian stock market. This has further strengthened their ongoing selling trend. In a short trading week due to holidays, foreign investors sold shares worth Rs 14,266 crore in just four sessions.
According to Ajit Mishra, Senior Vice President (Research), Religare Broking, uncertainty related to tariffs and geopolitical tensions have created pressure on the market. The effect of this was that the positivity brought by better Q3 results of some big IT companies also faded and FIIs continued to remain net sellers. He advised investors that considering the domestic and global environment, and the continuous outflow of foreign funds, it is important to manage leverage and position size carefully.
Even in the month of December, FIIs had sold shares worth Rs 22,611 crore. With this, the total foreign sales so far in 2025 have increased to Rs 1,66,286 crore. According to the data, FIIs sold shares worth Rs 11,766 crore in Q3, compared to Rs 76,619 crore worth selling in the third quarter of CY25. Where investment of Rs 38,673 crore had come in the April-June quarter, now its trend has completely reversed. The beginning of the year was also weak, when foreign investors had withdrawn Rs 1,16,574 crore in the January-March quarter.
Market expert V.K. Vijayakumar says that the high valuation of shares in India and the craze of AI trade have been the major reasons for the selling of FIIs. Due to this continuous selling, the rupee has also come under pressure and the rupee has weakened against the dollar. On the future trend of Nifty, Ajit Mishra says that if the index goes out of the current range, then there will be indications of the next direction. Investors should focus on quality largecap and strong midcap stocks. According to him, IT, metals and some PSU stocks may remain better sectors, while limited investment in rate-sensitive sectors like realty and capital goods is better for now.
