Amid weakening rupees against the US Dollar, the Federal Reserve slashing interest rates, and a tariff war looming large over the world, foreign institutional investors (FIIs) have sold Indian stocks worth 1.12 lakh crore so far this year, causing a blood bath on Dalal Street not once but on many days.
FIIs Offload Rs 1.12 Lakh Crore
According to the data shared by the National Securities Depository Limited (NSDL), the FIIs sold shares worth Rs 81,903 crore in January Rs and Rs 30,588 crore in February till February 14, 2025.
The national depository has shown that $3.5 billion worth of foreign portfolio Investments (FPI) have been dumped this year so far.
This whopping amount accounts for about 31% of their total sales of $11.45 billion.
The FIIs have offloaded their stakes in the Indian companies worth more than Rs 3 lakh crore since October 2024.
No Mercy To Banks, NBFC, FMCG Stocks
The data also show that the FIIs have been offloading the stocks of primarily banks and non-banking financial companies (NBFCs).
However, they have also been selling Fast Moving Consumer Goods and capital goods companies, due to weak earnings and concerns over slowing growth.
The investors’ sentiments and the general outlook have been bleak.
When Will Stock Markets In India Improve?
Analysts apprehend there is no immediate hope of recovery as the FII may pump money into the Indian stocks once again only after the economic growth in India picks up.
Analysts also fear that the tariff war is most likely to escalate and no respite for India is visible now.
The trade diversion due to the increased tariffs in the US may further harm India as countries like China and Vietnam may dump their products at competitive prices in India.
Though the US and India have vowed to strike a Bilateral Trade Agreement (BTA), it will take months before they could reach to a deal.
Dalal Street Witnesses Monday Mayhem
The stock market witnessed yet another mayhem on Monday, February 25, as it fell for the fifth consecutive session, and the benchmark, the Sensex nosedived more than 800 points in intraday trade.
The BSE Sensex on Monday opened on a subdued note at 74,893.45 against its previous close of 75,311.06. It dropped 817 points to the level of 74,493.97 within minutes.
Similarly, the NSE index Nifty 50 opened at 22,609.35 against its previous close of 22,795.90, fell more than 1% and hit the level of 22,548.35.
The benchmark index was 641 points, or 0.85% down at 74,670.48, by around 11:50 AM. Similarly, the Nifty 50 was seen 191 points, or 0.84% down at 22,605.40.
Did Moody’s Analytics Tigger Bloodbath?
The latest trigger may also be the macroeconomic indicators of Indian economy as Moody’s Analytics said GDP growth rate may further slow down to 6.4% in 2025 from the 6.6% recorded in 2024.
Besides, S&P Global’s flash US Composite PMI Output Index, fell to 50.4 in February, the lowest reading since September 2023.
The US Composite PMI Output Index is significant as it tracks the manufacturing and services sectors.
What next? Analysts believe the overall condition of the stock market in India will not improve shortly, barring a few technical corrections and occasional profit-takings.
