FII’s Offload ₹1.5 Lakh Crore Since Oct; Will the Selling Activity Wane Off in the Coming Days? Experts Answer

The Indian stock market witnessed intensified selling activity from Foreign institutional investors (FIIs) for the second consecutive month due to changing market dynamics and poor investor sentiments. In October alone, FIIs pulled out ₹113,858 crores, which further totaled to ₹1,55,730 crores till November 23.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “After selling equity for ₹113,858 crores through exchanges in October, FIIs have sold another ₹41,872 crores of equity through exchanges in November through 22nd. The total FII selling through the exchanges for the period 1st October through 23rd November stands at a whopping ₹1,55,730 crores. This is the kind of selling that happens in a year when FIIs are on selling mode.”

Let’s try to understand the possible reasons as to why FIIs are withdrawing their money from the Indian equity markets:

Weak earnings & high valuation

Analysts have expressed poor earnings growth for FY25, on account of disappointing Q2. Moreover, surging FII outflows can be attributed to higher valuations as India has been declared among the most expensive markets among the Emerging Markets (EM) group.

Sell India, Buy China

China has recently introduced a stimulus of 10 trillion yuan ($1.4 trillion) to revive its economy. This is leading to cheaper valuations, which in turn is attracting more investors in the country.

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities said, “The China factor also played a role in the recent selloff on Indian equities as FIIs chose to shift some funds to the Chinese market, assuming better short-term yields in comparison to India as valuations have become cheap.”

The Trump Impact

The Trump-led government in the US has promised to slash corporate tax rates from 21% to 15%. The move is expected to boost corporate earnings in the country. Moreover, stricter import tariffs in the near future will make manufacturing more competitive in the US. Overall, these measures will strengthen the greenback against other currencies, which will in turn lead to rupee depreciation.

What are the upcoming trends in the stock market?

As per experts, ‘Sell India, Buy China’ trade is over as valuations have already reached their peak in the US. Moreover, the value of large-cap companies in India dropped since their peak. Therefore, high FII outflows are likely to come down in the near future.

Vijayakumar said, “The major fundamental concern in the market now is the slowdown in the economy and tepid corporate earnings. If these trends are reversed, FIIs may even turn buyers. So, watch out for the macro data.”

On the contrary, Tapsee believes that FIIs will remain in sell mode on Dalal Street.

He said, “FIIs have been net sellers in this FY25, offloading ~ ₹-2.3 lakh crore till last Friday, with the majority of the selling seen in the month of Oct-Nov 2025. Global factors played well post-Trump victory, which can help FII gain a better yield in their home town. Additionally, rising inflationary concern is another reason why FIIs are reducing weightage and exiting India.”