Indian Stock Markets Hit Near Two-Month Lows

Indian stock markets have recently experienced a significant downturn, with the Nifty50 and BSE Sensex dropping over 2% in the last few trading sessions. This decline marks the third consecutive day of losses, with equity benchmark indices falling for four straight weeks.

The stock market downturn is being attributed to the persistent FII selloff. (AI image)

Why Are FIIs Selling Indian Stocks?

Foreign Institutional Investors (FIIs) have been on a selling spree, pulling out ₹28,528 crore in July alone, a sharp reversal from the previous four months where they were net buyers. Experts cite multiple factors for this shift, including the strengthening US dollar, expectations of a Fed rate cut, and the uncertainty surrounding the India-US trade deal.

Market Resilience Amidst FII Selloff

Despite the FII selloff, India's macro fundamentals remain strong, with GDP growth projected at 6.6% for FY26 and inflation under control. Domestic Institutional Investors (DIIs) have also provided a cushion with inflows of ₹37,687 crore this month, helping to stabilize the market.

Experts advise investors to focus on long-term goals and not react to short-term market fluctuations, emphasizing the resilience of the Indian markets.