FPIs offload Indian equities worth ₹34,574cr in February
What's the story
Continuing their selling spree into February, Foreign Portfolio Investors (FPIs) have offloaded Indian equities worth ₹34,574 crore.
This takes the total FPI outflows for 2025 to a whopping ₹1,12,601 crore.
The sell-off is attributed to high valuations of Indian stocks, concerns over corporate earnings growth, and global uncertainty, Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors said.
Sell-off details
Worst single-day sell-off in February
On February 28, FPIs witnessed their worst single-day sell-off for the month, selling Indian equities worth ₹11,639 crore.
Out of the 20 trading sessions in February, they were net buyers only twice. On February 18 and 4, they bought domestic shares worth ₹4,786.6 crore and ₹809.2 crore, respectively.
In January too, FPIs were net sellers with a total outflow of ₹78,027 crore.
Market analysis
Earnings concerns and global uncertainty drive sell-off
Bhowar attributed the sustained FPI outflow to high valuations of Indian equities and concerns about corporate earnings growth.
He noted that earnings reports for Q3 of FY2025 have been modest, indicating an atmosphere of uncertainty.
Revisions to forward earnings have struggled with downgrades outpacing upgrades, particularly among companies outside the Nifty 50 index.
Market performance
Nifty records worst February decline since COVID-19
The Nifty has posted its worst February-month fall since the COVID-19 pandemic, closing with cuts of 5.9%.
This was mainly due to what is being termed as the "Trump factor" that triggered a massive sell-off across sectors, especially IT, auto and pharma stocks.
On February 28, Nifty closed at 22,124.70 after plummeting by 420.35 points or 1.86%.
Investment trends
Focus shifting to Chinese stocks
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted an "important paradox" as FPIs heavily sell in financial services - a sector that is doing well with attractive valuations.
FPIs are focused on selling in India due to high valuations and moving their investments to Chinese stocks where valuations are much lower, he said.
However, when they return to India, they're likely to buy the same banking stocks they're currently selling.