Foreign investors accelerate exits as equity selling intensifies in 2025

Foreign institutional investors have significantly scaled back exposure to Indian equities in 2025, pushing net sales to ₹1.58 lakh crore so far. Persistent outflows were driven by higher US bond yields, a stronger dollar, and relative valuation concerns in domestic markets. Risk aversion increased during global uncertainty, prompting FIIs to reallocate toward developed markets. Despite the heavy selling, domestic institutional inflows and retail participation helped cushion benchmark indices from sharper declines.

Indian equities closed a truncated holiday week with marginal gains as investors remained cautious amid low volumes. Benchmark indices edged higher on selective buying in banking and energy stocks, while IT shares lagged. The rupee weakened against the dollar due to sustained foreign outflows and firm US yields. Traders expect near-term range-bound movement ahead of global data releases next week.