Foreign portfolio investors (FPIs) have continued their relentless selling of Indian stocks. In March month so far, the outflow from FPIs is to the tune of Rs 30,015 crore in Indian equities. Year-to-date, FPIs have sold more than Rs 1,08,000 crore from Indian stocks. As per experts, the current trade tensions due to uncertain US tariffs have pushed FPIs to choose Chinese stocks over India. However, the uncertain condition could lead to more money into safe haven assets like gold and the dollar. Gold last week touched a new all-time high with Comex gold hitting the $3,000 mark for the first time.
Indian Stock Market:
As per NSDL data, FPIs pulled out Rs 30,015 crore from Indian equities in March so far. While they sold Rs 324 crore from debt-VRR and Rs 149 crore in the hybrid market. They are buyers in debt-general limit and debt-FAR assets to the tune of Rs 7,355 crore and Rs 16,673 crore in March so far.
Overall, in March month, due to sharp selling in equities, FPIs outflow in the overall Indian market is about Rs 6,810 crore.
FPIs sold about Rs 34,574 crore in February 2025, and while their biggest selloff was seen in January 2025, to the tune of Rs 78,027 crore.
In Indian equities, FPIs overall outflow is about Rs 1,42,616 crore year-to-date. However, their buying of Rs 39,359 crore in debt-FAR took their overall selloff to Rs 1,08,322 crore in the Indian market.
What Has Soured FPIs In Indian Stocks?
As per Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the trend of FII selling in India continued in early March, too. But the intensity of selling is slowly declining as valuations are becoming reasonable. This month up to 14th FIIs have sold equity for Rs 30015 crores taking the total equity selling in CY 2025 so far to Rs 142616 crores.
He added that in the debt category FIIs were buyers in March so far. The total buy figure for debt (general category plus VRR) stood at Rs 7029 crores in March up to 14th.
What To Expect Ahead From FPIs?
Vijayakumar said the FPI outflows from India have been mainly going into Chinese stocks which have been outperforming other markets in 2025. The recent decline in the dollar index will limit the fund flows to the US. 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 dollar.
Gold Prices:
Last week, comex gold touched $3,000 mark, which is its new all-time high on hopes of rate cut from US Federal Reserve next week, after US reported softer than expected inflation figure.
Trading Economics data said, in the latest escalation of US President Donald Trump's multi-front trade war, he warned of a 200% tariff on European wine and other alcoholic beverages after the EU imposed a 50% tax on American whiskey exports. Meanwhile, recent PPI and CPI data signaled easing price pressures in February, giving the Fed more room to cut rates and boosting the appeal of non-yielding gold. Further supporting the metal are strong ETF demand and sustained central bank buying, with China extending its purchases for a fourth consecutive month. For the week, bullion is set for a gain of nearly 3%.
Gold prices in India also touched new all-time high. 24K gold price is at Rs 89,670 per 10 grams, while MCX gold futures hit a fresh record of Rs 88,310 per 10 grams last week.
Dollar Index:
Unlike gold, dollar index halted its two-sessions gaining spree on March 14, to close around 103.7. However, its weekly performance was flat. Sentiment in dollar in influenced by ongoing trade war tensions and Trump's tariff impact on US economy. Investors are observing where there are signs of recession in US ahead.
As per Trading Economics, while inflationary pressures have yet to emerge, uncertainty is weighing on consumer sentiment, with the University of Michigan's consumer sentiment index sinking to its lowest level since 2022. Meanwhile, market optimism improved as lawmakers in Washington moved closer to preventing a government shutdown, with Senate Minority Leader Chuck Schumer voicing support for a GOP stopgap bill to extend funding. Looking ahead, investors await the FOMC's decision next week, where the Fed is expected to keep interest rates unchanged. However, attention will be on the central bank's updated economic projections and policy guidance, with markets currently pricing in two quarter-point rate cuts this year.
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