The relentless FII selling continues. In fact FIIs sold Rs 6,287 crore in a single session on February 24, 2025. This is the largest single-day outflow since November. FIIs had sold Rs 11,756 crore on November 28, 2024. Overall, for 2025, the FIIs have sold Rs 1.30 lakh crore in 2025 alone and over Rs 3 lakh crore since October 2024.
India is now ranked the second-last in APAC region in terms of allocation, as reported by Financial Express. The latest fund manager survey (FMS) by Bank of America highlighted that allocation to Indian equities are down to a two-year low now and at the same time China has seen significant rebound.
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One of the key narratives that have been doing the rounds is that FIIs have been selling Indian stocks like there is no tomorrow and are shifting allocation to other attractive Asian markets like China.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services pointed out that, “The sharp surge in Chinese stocks is another near-term headwind. The ‘Sell India, Buy China’ trade may continue for some time since Chinese stocks continue to be attractive. The sharp spike in CBOE VIX indicates that volatility will continue for sometime. In the US long-term inflation expectations are rising and, therefore, the expected rate cut by the Fed is unlikely to materialise. The Fed might even turn hawkish, impacting US stock markets. If this happens and the US bond yields start declining, FIIs may cease to be sellers in India and may even resume buying. The near-term scenario is highly uncertain.”
Factors helping ‘Buy China Sell India’ narrative
In fact, the Chinese markets have been among the best performing markets globally in 2025.While the Sensex and the Nifty are down over 4% for the year, some of its Asian peers like Hang Seng have risen over 15% in 2025 so far. The gains on Hang Seng Index is particularly relevant as FIIs invest in Chinese stocks through this. The Hang Seng Index has made a staggering recovery from January lows, up 24% from the lows and the Index has now surged to 3-year highs.
Hang Seng’s market capitalisation was $4.56 trillion (HK$35.4 trillion) at the end of January 2025,
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