Mumbai
Foreign Institutional Investors (FIIs) have been selling heavily in Indian markets recently, but experts believe this trend could ease soon. With large-cap valuations now lower, market analysts see signs of relief, market watchers said on Saturday.
IT stocks have shown strength as FIIs continue buying in the sector. Banking stocks have also held firm, supported by domestic institutional investors (DIIs) despite the FII sell-off.
In October, FIIs sold equities worth ₹1,13,858 crore. This selling continued in November, with ₹41,872 crore sold through exchanges by November 22. However, FIIs also purchased ₹15,339 crore in the primary market, largely through IPOs. From October 1 to November 23, total FII selling reached ₹1,55,730 crore.
Vinod Nair, Head of Research at Geojit Financial Services, explained three key reasons for this sell-off: the “Sell India, Buy China” strategy, concerns over FY25 earnings, and the “Trump trade.” However, Nair noted that the first two factors are fading, and the third is nearing its end as U.S. valuations peak.
The Securities and Exchange Board of India (SEBI) has introduced measures to enhance market stability. Rohit Agarwal, CEO of Dovetail Capital, believes these changes will strengthen derivatives trading and attract foreign investors.
Experts predict FII selling will taper off as the year ends, helped by large IPOs like Swiggy and Hyundai. Vipul Bhowar from Waterfield Advisors suggests major FII investments may resume once global policies, including those of the Trump administration, become clearer.
