FPIs sold ₹34,574 crore worth of shares in February, causing a 5.9% drop in Nifty. While the financial sector experienced pressure, the outlook for economic improvement remains.
Share Market: Foreign Portfolio Investors (FPIs) engaged in significant selling in the Indian stock market during February 2025. Throughout the month, they offloaded shares worth ₹34,574 crore. Since the beginning of 2025, FPIs have sold a total of ₹1,12,601 crore worth of shares.
Largest Single-Day Selling
On Friday, FPIs sold ₹11,639 crore worth of shares, marking the highest single-day selling in February. This indicates weakening confidence among foreign investors in the Indian market.
Only Two Days of Buying
During the entire month of February, FPIs bought shares on only two days: February 4th (₹809.2 crore) and February 18th (₹4,786.6 crore). Prior to this, in January 2025, FPIs sold ₹78,027 crore worth of shares. They also sold ₹1,15,629 crore worth of shares in October and November 2024.
5.9% Decline in Nifty
The Nifty 50 index experienced a 5.9% decline in February, marking the steepest fall since the COVID-19 pandemic in 2020. On Friday, the Nifty closed at 22,124.70, breaking several key support levels. A 420.35-point drop was recorded on that day.
Sectors Most Affected?
Dr. V.K. Vijayakumar, Chief Investment Strategist at Gozit Financial Services, explained that FPIs are selling heavily in the financial sector, despite its relatively b performance compared to other sectors. He stated, "FPIs are leaving the Indian market because they find it expensive. They are investing in the Chinese stock market, where valuations are lower. However, in this process, they are also abandoning the best-performing sector of the Indian market."
Hope for Economic Improvement
India's Q3FY25 GDP figures indicate signs of economic improvement, with a growth rate of 6.2%. If corporate income also shows improvement, a recovery in the Indian stock market is possible, and FPIs may resume buying.
