In January 2025, foreign portfolios (FPIS) continued to withdraw from Indian stock markets, which led to a net external flow of 78,027 rupees. Indian stocks are currently witnessing a four -month dominant trend, which represents its worst performance in 23 years. This decline can be attributed to factors such as poor profits, foreign capital flows, and economic uncertainty, all of which have moisturized the highest levels in the market.
The last increase in the US dollar and the increase in US bond returns, after the re -election of Donald Trump, has made American assets more attractive to investors. As a result, the capital was resurrected from Indian stocks. While FPIS was 15,448 rupees in December 2024, they have since sold 94,017 rupees in October and 21,612 rupees in November, which contributed more to the flow of capital from the Indian market.
Referring to the sale, Deepak Shinoy, CEO of Capitalmind Financial Services, said that in February, FPIS has sold 2600 rupees, but bought 13,400 rupees. He added that buying massive debts happens.
“In February so far, FPIS sold 2600 C.
What is behind the FPI external flows?
The strengthening of the US dollar and the increase in US bonds after Donald Trump’s return to the presidency has led to the transformation of capital from Indian stocks into more attractive American assets.
Despite the experience of a large sale in January, FPIS investors (FPIS) reflected this trend in December 2024, to become two net buyers of 15,448 rupees. On the other hand, FPIS emptied 94,017 rupees and 21,612 rupees in October and November, respectively.
Sanjev Hua, Vice President of Research Management Department at Meress Aseet Satelli, said the strongest dollar, high American observation, tariff concerns, slow local economic growth, and high stock evaluation, will only pay more FPIS.
According to VK Vijayakumar, the largest investment strategy in Geojit Financial Services, the main reason for the last FPI withdrawal is the impressive performance of the American economy and corporate profits, which exceeded the path of growth and last profits in India.
Vegayacomar pointed out that although the budget had a positive impact on feelings, the uncertainty caused by President Trump’s identification policies has led to a disruption in the global economic scene.
“The budget has improved morale, and with the expectation of growth and expected profits, the direction can be reflected. However, Trump’s tariff policies are injecting uncertainty in the global economic scene.”
FPI opposite Dii
As foreign portfolios (FPIS) continues to withdraw money from Indian shares without any signs of slowdown, local institutions intervened to accommodate the pressure pressure by injecting billions in the market. They bought the shares, which total 86,591 rupees, almost balanced the sale of FPI and preventing large shrinkage in the market.
NIFTY 50 and Sensex witnessed decreases of more than 0.5 % at the end of January, which represents the fourth consecutive month of the losses of indicators. This is the first case in the past 23 years when the main indicators have seen four consecutive months in red.
Medium and small stocks faced the burning of clouds significantly decreased during the month, with the CAP 100 NIFTY index decreased by 10 %, which represents the largest monthly decrease since February 2022. In addition, the elegant MIDCAP 100 index witnessed a 6.10 % decrease.
FPIS and govt bonds
According to the 2025 Economic Survey issued on January 31, FPIS 62,431 rupees have invested in government bonds since it was included in the JP Morgan Index. The survey also highlighted an increase in the activity of the FPI debt sector, with cumulative flows of up to 1.1 rupees of Rs.
On June 28, JP Morgan 29 added government securities under the fully accessible path (FAR) in the emerging market index. India currently has a weight of 1 percent in the index, with gradual planned increases every month until March 2025. Many non -residents are allowed to invest in securities specified by the government in India without any investment limits.
In the fiscal year 25, the inclusion of a clear flow of more than 3 billion dollars of remote Indian bonds, with the number of custody assets of 28 billion dollars as of December 15, 2024.