- Foreign investors withdrew ₹64,156 crore from Indian equities in January 2025, reflecting a shift in sentiment.
- Depreciating Rupee, rising US bond yields, and tepid earnings expectations contributed to the outflow.
- The Nifty50 index closed near its low after heavy selling from FPIs and weak corporate earnings.
The Indian stock market has seen a substantial withdrawal of funds from foreign investors in January 2025, totaling ₹64,156 crore. This marks a significant reversal from December 2024, when investors were more optimistic, contributing ₹15,446 crore to Indian equities.
The Nifty50 index experienced increased volatility in the latter half of January, with major heavyweights like HDFC Bank and Reliance Industries seeing significant declines.
January 2025 Sees Record FPI Outflow from Indian Equities Amid Macroeconomic Pressures
In January 2025, foreign portfolio investors (FPIs) withdrew a significant ₹64,156 crore from Indian equities, signaling a shift in investor confidence. The withdrawal comes after a strong inflow of ₹15,446 crore in December 2024. Market experts attribute this trend to the depreciation of the Indian Rupee, higher US bond yields, and concerns about an underwhelming earnings season.
The Nifty50 index showed signs of volatility, dropping after an early rally on January 26. Foreign selling pressure, combined with disappointing earnings from key companies like HDFC Bank and Reliance Industries, caused the market to close lower. The broader market also struggled, with the Nifty Midcap100 and Smallcap100 indices falling significantly.
Globally, factors such as the US Federal Reserve’s policies, President Trump’s economic strategies, and the Bank of Japan’s rate hikes are influencing investor sentiment. These external factors, along with domestic concerns, are keeping market participants cautious and creating an environment of unpredictability.
Looking ahead, analysts expect further volatility in Indian equities, especially with the Union Budget scheduled for February 1, 2025. Stocks in sectors like defense, railways, and capital goods are expected to remain in focus, as potential budgetary measures may shape their future performance.
As FPIs pull out of the Indian equity market amidst economic uncertainty, domestic investors are left to navigate a volatile landscape marked by global headwinds and earnings concerns.
“The continued depreciation in the Indian Rupee is exerting significant pressure on foreign investors, leading them to pull the money out of the Indian equity markets.” – Himanshu Srivastava,
