In a recent weakness signal, foreign portfolio investors (FPIs) have withdrawn Rs 555 crore from Indian equity in July, according to NSDL data. This marks the first monthly flow after a positive flow of three straight months in April, May and June.
V.K. Vijay Kumar noted, “FPI flow is indicative of weakening. After three months of positive flow, FPI has become negative, though so far in July, it has been in the margin.”
He gave the latest stance to the previous heavy sales in January and February, and said, “In the first three months of this year, the FPI flow was negative and the trend was reversed in the next three months.”
Despite selling in secondary markets, FPI remained active in the primary market. Vijay Kumar added, “An important trend in FPI investment is that FPI has been consistently buyers/investors in the primary market while they are selling through exchanges.”
Explaining the flow in July, he said, “FPIs in July may be attributed to the redeem of the FPI after March and as a result of the elevated valuation in the market. Since other markets are related to India, FIIs may again sell money in cheaper markets as a short -term strategy.”
In the widespread global context, India has not been the top performers in emerging markets. “In the H1 2025, most markets, including the MSCI EM index in the Indian market, were influenced,” he noted.
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