FIIs Dump Rs 1.58 Lakh Cr in 2025, But Rs 3,000 Cr Year-End Buying Sparks 2026 Reversal Hopes: Here’s Why
Overview of FII Activities in 2025
Foreign Institutional Investors (FIIs) have had a tumultuous year in the Indian market. Here are the key takeaways:
– After a robust inflow of Rs 14,610 crore in October, November witnessed a sell-off of Rs 3,765 crore.
– In December alone, FIIs sold Indian equities amounting to Rs 14,185 crore, bringing the total outflows for 2025 to Rs 1,57,860 crore.
– Recent trends indicate a slowdown in this selling spree, with net outflows narrowing to just Rs 252 crore this week. This was bolstered by significant buying activity in the last three sessions leading up to the Santa Claus rally.
Highlights of Recent Buying Activity
– Over the past three trading sessions, foreign investors purchased domestic equities worth Rs 3,003 crore, which included a sizeable Rs 1,831 crore on a single day (Friday).
– According to V K Vijayakumar, Chief Investment Strategist at Geojit Investments, this uptick in buying hints at a potential reversal of FII sentiment as 2025 draws to a close.
Impact on the Indian Rupee
– The FII outflows, coupled with a significant trade deficit, have adversely affected the Indian rupee, which has become the weakest currency in Asia, depreciating nearly 5% in 2025.
– However, the recent two-day rebound saw the rupee strengthen from a low of 91.14 against the dollar on December 16 to 89.29 on December 19. This recovery has mitigated some selling pressure from FIIs.
Future Outlook for 2026
– Vijayakumar maintains a positive outlook on FIIs returning to the Indian market in 2026, supported by steady GDP growth and improving corporate earnings.
– In 2025, the landscape has been quite dynamic:
– Rs 76,619 crore worth of shares were offloaded by FIIs in the third quarter (July-September), reversing the previous quarter’s inflow of Rs 38,673 crore.
– The year began on a negative note, with an alarming Rs 1,16,574 crore pulled out during the January-March quarter.
Conclusion
The FIIs’ significant outflows totaling Rs 1.58 lakh crore in 2025 have raised concerns, but the recent Rs 3,000 crore in year-end buying has sparked hopes for a reversal in 2026. As the Indian market braces for the new year, investors are cautiously optimistic about a recovery fueled by improving economic indicators and potential foreign investment resurgence. The question now is whether this positive momentum can be sustained into the next fiscal year.