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Key Points

Foreign portfolio investors withdrew Rs 17,741 crore from Indian equities in July, reversing three months of inflows. Geojit's VK Vijayakumar notes FPIs continued primary market investments despite exchange sell-offs. US-Russia tensions and dollar strength have temporarily dampened market sentiment. Analysts expect FPI flows to stabilize once global trade uncertainties ease.

Key Points: FPIs Offload Rs 17,741 Crore in July Amid Global Trade Tensions

  • FPIs sold Rs 31,988 crore in July via exchanges
  • Primary market inflows hit Rs 14,247 crore in July
  • US-Russia tensions spooked short-term market sentiment
  • Analysts expect FPI rebound post-trade deal clarity
2 min read

FPIs offload Rs 17,741 crore in July, trend may reverse after trade tensions wane

Foreign investors sold Rs 17,741 crore in Indian equities in July, but analysts predict a rebound as global trade tensions ease.

"FPI selling in IT stocks pushed down the IT index, and uncertainty in pharma impacted the sector despite strong results. – VK Vijayakumar, Geojit Investments"

New Delhi, Aug 3

As foreign portfolio investors (FPIs) became net sellers in the Indian equity market in July, analysts said on Sunday that continuous FPI inflows can be expected once global trade tensions settles.

FPIs made a total outflow of Rs 17,741 crore last month, marking a shift after three consecutive months of inflows during April, May, and June, according to data released by NSDL.

May saw the highest FPI inflows so far in 2025, while January witnessed the largest sell-off, with net selling of Rs 78,027 crore worth of outflows.

“FPIs sold equity worth Rs 31,988 crores through the exchanges in July. This selling takes the total sale figure for 2025 to Rs 13,1876 crores. However, the FPI strategy of buying equity through the primary market also continued in July, with a monthly buying figure of Rs 14,247 crores," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

The total investment of FPIs through the primary market in 2025 till date reached Rs 36,235 crores. This is a steady trend reflecting the FPI preference for fair valuations, Vijayakumar added.

Last week, US President Donald Trump gave Russia a 10-12 day deadline to end the war in Ukraine, failing which could result in additional sanctions and secondary tariffs on countries that trade with Russia, pushing oil prices higher. This move has impacted market sentiments in the short-term, Vijayakumar said.

"The sharp appreciation in the dollar index to 100 is a headwind, which can impact FPI inflows in the near term. Market perception suggests that following the initial chaos, a deal will be reached between India and the U.S. after the next round of negotiations. A steady trend of FPI flows will emerge after the dust settles," Vijayakumar added.

"FPI selling in information technology (IT) stocks pushed down the IT index, and the uncertainty relating to pharmaceuticals impacted the pharma index, too, despite the good results from many companies in the sector," he added.

—IANS

- IANS

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Reader Comments

S
Shreya B
The primary market investments show FPIs still have faith in India's growth story. The secondary market selling is just short-term profit booking. Long-term investors shouldn't panic!
A
Aman W
Why is our market so dependent on FPI flows? We need to develop stronger domestic institutions. Too much reliance on foreign money makes us vulnerable to global shocks.
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Priya S
The IT sector correction was overdue. Valuations had become too high. Maybe now retail investors can enter at better prices 🤑. Every cloud has a silver lining!
V
Vikram M
The US-Russia tensions affecting our markets shows how interconnected the world is today. Hope our policymakers have contingency plans for such situations.
K
Kavya N
Good analysis by Vijayakumar as always. The point about primary market investments is reassuring. Shows FPIs are still betting on India's long-term potential despite short-term turbulence.

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