Winning Bizness Desk
Mumbai.Foreign Portfolio Investors (FPIs) have continued to pull money out of Indian equities, taking out nearly Rs 18,000 crore in August 2025 alone. Data from depositories show that total outflow from the Indian stock market this year has reached Rs 1.13 lakh crore. Between August 1 and August 8, FPIs sold shares worth Rs 17,924 crore. In July, they had withdrawn Rs 17,741 crore on a net basis. Earlier, between March and June, FPIs had pumped Rs 38,673 crore into Indian stocks.
Tariff hikes and weak results rattle investors
The sharp change in sentiment has been triggered by rising trade tensions between India and the United States, weak first-quarter corporate earnings, and a weakening rupee. Analysts say the recent US move to impose a 25% tariff on Indian goods from August 1, followed by an additional 25% hike this week, has spooked foreign investors. This has prompted large-scale selling in Indian equities.
One-day buying but cautious outlook remains
Despite the heavy monthly sell-off, FPIs and Domestic Institutional Investors (DIIs) were net buyers on August 8, the last trading day of the week. FPIs bought shares worth Rs 1,932.81 crore while DIIs purchased Rs 7,723.66 crore. In total, DIIs bought Rs 16,682.09 crore and sold Rs 8,958.43 crore worth of shares that day. FPIs bought Rs 17,682.11 crore and sold Rs 15,749.30 crore. Experts say this does not signal a trend reversal yet.
Global yields draw money away from India
Apart from tariffs, rising US Treasury yields have made American debt more attractive for foreign investors. This has led to capital moving away from Indian equities into safer, higher-yielding assets. Analysts expect the FPI stance to remain defensive in the short term, with trade policies and tariffs being key drivers in the coming weeks.
Debt market sees steady foreign inflow
Interestingly, even as FPIs have exited equities, they have continued to invest in Indian debt markets. In August, they invested Rs 3,432 crore through the debt general limit route and Rs 58 crore under the debt voluntary retention route. This indicates that foreign investors still see value in fixed-income assets despite the equity market sell-off.
Markets slide below key levels
The stock market ended the week deep in the red. The Sensex fell 742 points over the week, slipping below the 80,000 mark for the first time in four months. On August 8, the index closed 765 points lower at 79,858, compared with 80,600 on August 1. The Nifty also fell 246 points to close at 24,350. Out of 30 Sensex stocks, only five ended higher while 25 declined. Metal, IT, auto, and realty shares saw the biggest losses.
Story in a nutshell
1. FPIs pulled Rs 18,000 crore from Indian stocks in August so far.
2. Total equity outflow in 2025 stands at Rs 1.13 lakh crore.
3. Tariffs and weak earnings are driving the sell-off.
4. US hiked tariffs on Indian goods by 50% in two steps.
5. FPIs and DIIs were net buyers on August 8.
6. US Treasury yields are attracting foreign capital away.
7. Debt market still gets steady foreign investment inflow.
