New Delhi: FII selling in India continues in early March, but the intensity of selling is slowly declining as valuations are becoming reasonable in the stock market, according to experts. This month (up to March 14), FIIs have sold equity for Rs 30,015 crore, taking the total equity sold in CY 2025 so far to Rs 1,42,616 crore.
In the debt category FIIs were buyers in March so far. The total buy figure for debt (general category plus VRR) stood at Rs 7,029 crore in March to date, say market watchers. However, the heightened uncertainty triggered by the trade war between the US and other nations is likely to push more money into safe asset classes like gold and the dollar, they added.
According to Shridatta Bhandwaldar, Head Equities at Canara Robeco Mutual Fund, FIIs have been significant sellers in the Indian equity market over the past three months, with outflows amounting to $15-20 billion. “However, as the initial shocks subside, we expect FII flows to at least stabilise in the next quarter and eventually turn positive over time,” he mentioned.
“For this to happen, though, our earnings will need to show substantial improvement from current levels. We believe that the slowdown in earnings growth is more cyclical than structural, noting that a similar trend was observed in FY23,” he added. Valuations for the Nifty index are already below its 10-year average for one-year forward earnings.
Meanwhile, in the last week, the Indian stock markets remained largely range-bound, ending slightly lower amid mixed global cues and investor caution. The benchmark indices saw mild corrections as concerns over global trade policies and sector-specific sell-offs weighed on sentiment.
Analysts expect volatility to persist in the upcoming sessions as investors track global developments, particularly economic data releases from the US Federal Reserve and domestic macroeconomic indicators.
While the 22,250-22,650 range remains a key technical zone for the Nifty 50, a breakout in either direction could determine the market’s trajectory in the near term, as per market experts.