FPIs withdraw Rs 17,955 crore from Indian equities in December as total outflow hits Rs 1.6 lakh crore in 2025
Foreign Portfolio Investors withdrew Rs 17,955 crore from Indian equity markets in December, taking the total net FPI outflow for calendar year 2025 to about Rs 1.6 lakh crore. Analysts say sustained selling pressure could affect market confidence.
Foreign Portfolio Investors continued their selling streak in Indian markets with a withdrawal of Rs 17,955 crore from equities in December alone. This adds to a broader trend of outflows seen throughout 2025, taking the total net equity outflow by FPIs to approximately Rs 1.6 lakh crore for the year.
Market observers point out that FPIs have been reducing their exposure to Indian stocks in response to global macroeconomic uncertainties, higher interest rates in some developed economies and concerns about returns compared to other emerging markets. This persistent selling pressure has weighed on benchmark indices at various points during the year.
The December outflow was led by heavy selling in key sectors such as financials, technology and consumer related stocks. FPIs often allocate capital based on risk and return profiles, and during periods of global volatility they tend to shift funds to safer or higher yielding markets. Indian equities were not immune to this dynamic in the final month of the year.
Despite the outflows, domestic institutional investors continued to support the market with net purchases, helping cushion some of the downward pressures created by foreign selling. Analysts say that domestic investor participation is critical to maintaining market stability when foreign flows turn negative.
A combination of factors such as tightening monetary policies abroad, geopolitical concerns and shifts in currency valuations have influenced FPI behaviour in 2025. Experts suggest that improving economic data from India, corporate earnings strength and policy clarity could help attract foreign capital back into the market.
Looking ahead, traders and investors will closely watch global cues, central bank policy moves and corporate earnings as potential catalysts for capital flow reversal. For now, the significant FPI outflows highlight the need for markets to build resilience and diversify investor participation to reduce dependence on foreign capital.
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