The relentless FII selling in India continues. If we now take a stock of the total selling since September 2024, it has breached Rs 3 lakh crore. In fact, for 2025 alone, foreign institutional investors have already sold over Rs 1 lakh crore. After the massive Rs 87,000 crore selloff in January, the FII selling in February so far is Rs 29,183.43 crore. The question that bothers many at this stage is when will this relentless selling by FPIs stop”
FII SellingMonthly Outflow (Rs Cr)February (Till Feb 14), 2025 -29,183.43January, 2025-87,374.66December, 2024-16,982.48November, 2024-45,974.12October, 2024-114,445.89FII selling since September 2024
Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services highlighted that, “Reversal of FII strategy will happen when the dollar index moves down. This will happen but we can’t predict when. “Despite many positive developments like a good Budget, rate cut by the RBI and slight improvement in Q3 results, the FIIs continued to press sales. Since largecaps dominate the assets under custody of FIIs, largecaps have been facing the brunt of FII selling. Relentless selling in largecaps has made their valuations attractive, opening up opportunities for long-term investors.”
In fact, when we had spoken to Deven Choksey, Managing Director of DRChoksey FinServ last week and he had pointed out that the moment the Dollar Index “heads towards 104 mark, it will be the first sign that the market is turning up.”
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The dollar Index is at the moment trading around the 106 mark. The 5-day return on Index is in negative, a tad over a percent. Though on a year-to-date basis, it is down 1.64% from the recent highs of 110 that it hit on January 13, 2025, it is up 2% in last 1 year.
For the month, the Dollar Index is down 2%. It had hit a 52-week low of 100.16 on September 27, 2024 and there onwards it started the upward trajectory.
The dollar’s strength has also maintained its appeal for FIIs in comparisn to the EM basket.
Dollar IndexReturns5-day-1.24%1-month-2.07%YTD-1.65%3-month+0.01%1-Year+2.31%Dollar Index Returns over 1 year Valuation concerns add fuel to FII selling
The Dollar Index trending higher doesn’t just mean that US assets will be more attractive for FIIs but there are also other domino impact.
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