Foreign Investors Retreat from Indian Equities

Foreign Portfolio Investors (FPIs) have turned net sellers in July, withdrawing Rs 5,524 crore from Indian equities amidst ongoing US-India trade tensions and mixed corporate earnings. This marks a significant shift from the previous three months of positive investments.

2025 Sees Massive Outflows

The total outflows for the year 2025 have now escalated to Rs 83,245 crore, as per the latest depository data. This trend reflects growing investor caution due to elevated market valuations and external economic pressures.

Expert Insights

Himanshu Srivastava, Associate Director at Morningstar Investment Research India, highlights the dependency of future FPI movements on the resolution of US-India trade discussions and the improvement in corporate performance. "Resolving trade disagreements and showcasing robust earnings could be key to restoring investor confidence," Srivastava noted.

Investment Trends

Following a positive investment phase in June (Rs 14,590 crore), May (Rs 19,860 crore), and April (Rs 4,223 crore), the current withdrawal echoes the earlier trends observed in March, February, and January, with outflows of Rs 3,973 crore, Rs 34,574 crore, and Rs 78,027 crore respectively.

Market Sentiments

The cautious investment outlook is further compounded by concerns over US interest rate policies and the sustainability of corporate profitability, amidst a backdrop of mixed earnings reports.