Foreign Institutional Investors (FIIs) have sold Indian equities worth Rs 14,185 crore so far in December, taking total outflows in 2025 to Rs 1,57,860 crore. However, recent trends point to a moderation in selling, with net outflows narrowing to just Rs 252 crore this week, aided by buying in the last three sessions ahead of the Santa Claus rally. The late-year inflows have sparked hopes of a potential reversal in 2026.
Foreign investors bought domestic equities worth Rs 3,003 crore over the last three sessions, including purchases of Rs 1,831 crore on Friday.
Commenting on the current trends, V K Vijayakumar, Chief Investment Strategist at Geojit Investments, called the buying a reversal of foreign investors towards the close of 2025, though he said that FIIs have remained invested in domestic equities via the primary markets despite selling in the secondary markets.
The FII outflows and trade deficit have had a sustained adverse effect on the Indian rupee, which has turned out to be the worst-performing currency in Asia, falling nearly 5% in 2025, Vijayakumar said.
“However, the last two days witnessed a reversal of the currency depreciation. The rupee bounced back from a low of 91.14 to the dollar on December 16 to 89.29 on December 19. This strengthening of the currency also helped stem the tide of FII selling, too,” the Geojit analyst said.
He remains positive about FIIs returning to India in 2026, backed by steady GDP growth and improving corporate earnings growth.
After a strong inflow of Rs 14,610 crore in October, November saw a sell-off worth Rs 3,765 crore.
In the third quarter (July-September) of CY25, FIIs offloaded shares worth Rs 76,619 crore, reversing the buying seen in the April–June period when inflows totalled Rs 38,673 crore. The year opened on a sharply negative note, with foreign investors pulling out a massive Rs 1,16,574 crore during the January–March quarter.
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