FIIs Dump Rs 7,608 Cr in Two Sessions After Rs 1.66 Lakh Cr Sell-Off in 2025: Will There Be a Trend Reversal in 2026?
Foreign Institutional Investors (FIIs) have made headlines in early 2026 as they offloaded Indian stocks, continuing a concerning trend from the previous year. This significant outflow has also had repercussions on the Indian rupee. Despite entering a new year, FIIs sold Indian equities worth Rs 7,608 crore during the first two trading sessions of 2026.
The FII Sell-Off in 2025
– Total Outflows: Rs 1,66,286 crore
– December Selling: Offloaded shares worth Rs 22,611 crore
– Record Year: 2025 marked the worst selling by FIIs since they began investing in India, with total equity sales reaching Rs 2.40 lakh crore in the secondary markets.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, termed this sell-off unprecedented, emphasizing the depth of FII exit. Although FIIs invested Rs 73,909 crore in the primary market during the same period, the overall trend remained negative.
Key Figures:
– Q3 Selling: Rs 11,766 crore
– Third Quarter Selling: Rs 76,619 crore
– January-March 2025: Massive outflow of Rs 1,16,574 crore
Factors Behind the FII Exodus
– Elevated Valuations: The high valuations in India deterred investment.
– AI Trade Dynamics: The booming AI sector shifted focus away from Indian equities.
– Rupee Depreciation: The Indian rupee has been the worst-performing major currency of the year, depreciating nearly 5%.
Outlook for 2026: Potential Trend Reversal?
Despite the disheartening data, analysts express a cautious optimism for 2026.
– Vijayakumar’s Prediction: Improvements in India’s economic fundamentals are expected to draw back foreign investments.
– GDP Growth: Strengthening GDP projections and enhanced corporate earnings may contribute to positive FII inflows.
Nilesh Jain, Head Vice President – Equity Research at Centrum Broking, expects 2026 to be a recovery year.
– Nifty Target: December 2026 target set at Rs 29,731, projecting a 13% upside.
– Macro Indicators: Indicators like robust GDP growth, lower inflation, and fewer corporate earnings downgrades contribute to this positive outlook.
Conclusion
The ongoing FII sell-off, resulting in a substantial outflow, poses challenges for the Indian market amid concerns over macroeconomic stability. However, experts are hopeful that 2026 could witness a trend reversal driven by improving economic indicators and renewed investor confidence. As the landscape unfolds, market participants will be closely monitoring these developments for signs of recovery in foreign investment trends.