FII turns net buyer after 9 sessions of selling; Will this trend continue?

Foreign institutional investors (FIIs) have finally been Net Buyers breaking their streak of continuous selling. After 9 consecutive days of selling they bought shares worth Rs. 4,787 Crores on February 18, 2025, though the Net buying was primarily because of the Airtel Block deal ( Rs 5130 Crore).

FIIs’ Selling Streak and DIIs’ Market Support

Foreign Institutional Investors (FIIs) have been consistently selling in the Indian stock market since October 2024. Their monthly sell-off stood at Rs. 1,14,446 crore in October, followed by Rs. 45,974 crore in November, Rs. 16,982 crore in December, Rs. 87,375 crore in January, and Rs. 28,335 crore so far in February.

Meanwhile, Domestic Institutional Investors (DIIs) have been countering the sell-off by actively buying. In October, they purchased Rs. 1,07,225 crore worth of shares, followed by Rs. 44,484 crore in November, Rs. 34,195 crore in December, Rs. 86,592 crore in January, and Rs. 33,851 crore so far in February, providing crucial support to the market.

Also read: Chemical stocks that may be affected as US imposes new reciprocal tariffs on Indian exports

Reasons why FIIs’ are selling in Indian Markets

Foreign investors have been selling in the Indian stock markets due to multiple factors. One of the primary reasons is the strength of the US dollar, which makes emerging market investments less attractive. Additionally, concerns over the slowdown in corporate earnings growth, global stability issues, and the high valuations of Indian markets compared to other emerging markets have contributed to this selling trend.

Market Reaction to Continuous FII Selling

The stock markets have been on a declining trend since Foreign Institutional Investors began their persistent selling. The Nifty 50 has fallen 12.70 percent from its 52-week high of 26,277, recorded in September 2024. The broader markets have also witnessed significant corrections, with the Nifty Small Cap 250 down 22.22 percent from its 52-week high of 18,688, and the Nifty Mid Cap 100 declining 21.12 percent from its 52-week high of 60,926.

Written By Abhishek Das

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