If you are in the camp that was celebrating the first FII buying in the market after 23 sessions, well they are back to selling again. FIIs have sold Rs 1683 crore worth equities in the market today- February 5 while DIIs bought Rs 996 crore worth equities.
In fact, FII selling trends thus far indicate that they have sold equities worth Rs 93,533.72 crores in India so far in 2025. In January, they had sold Rs 87,374.66 crore after the massive 1.77 lakh crore sold in the previous three months or the last quarter of 2024.Notably, FII outflows were at second record highs in January, 2025 after the massive Rs 1.14 lakh outflow in October last year.
It is no secret that investors are worried about why FIIs are selling like there is no tomorrow. Market experts have pointed out that it is not much of a worry for India now. The FII selling, at the moment, has got more to do with the dollar’s movement than with core EM fundamentals.
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That brings us to the question that, ‘what’s fuelling the outflow? Shrikant Chouhan, Head equity research, Kotak Securities explained that this is “Nothing serious. For the next few days we need to observe the FII trends. It will primarily depend more on how dollar index and 10-year bond yields performs .. if we see further decline in , then FIIs will stop or will slow down selling in Emerging Markets.”
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Siddarth Bhamre, Head Institutional Research-Asit C. Mehta Investments Interrmediates corroborated that view and added that, “Liquidity world over is moving towards dollar denominated assets. Reprcussions of Trump’s policies are being felt in EMs. US bond yields and dollar had started strengthening even before the US election results were declared. The entire EM basket is seeing outflows. So, you have to understand that the current FII selling has more to do with what is happening in US and less with what’s happening in India.”
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