There has been a continuous sell-off in the stock market for some time now. The market is witnessing a bigger decline after every recovery. So far in January 2025, foreign portfolio investors have sold shares worth ₹44,396 crore. Foreign investors seem to be disillusioned with the Indian market amid the strength of the dollar, rise in US bond yields and expectations of weak results of companies in the December quarter.

Earlier in December 2024, foreign portfolio investors had invested ₹ 15,446 crore. This sell-off by foreign investors is being seen due to changes in global sentiments and challenges on the domestic front.

Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Adviser India, said that the continuous fall in the rupee is putting constant pressure on foreign investors, after which they are selling in the Indian equity market. He said that expensive valuations after the recent correction, expectations of weak results and sluggishness and uncertainty in economic growth are also a reason for the sell-off by foreign investors. According to depository data, so far this month i.e. till January 17, foreign portfolio investors (FPIs) have sold a net ₹ 44,396 crore. Apart from January 2, FPIs have sold in all other sessions this month. VK Vijayakumar, China Investment Strategist, Geojit Financial Services, said that the main reason for the selling by FPIs is the strength in the dollar and the rise in US bond yields. The dollar index is at 109. At the same time, the US bond yield has reached 4.6%. In such a situation, it is logical for FPIs to sell in emerging markets. Especially in markets like India where valuations are already expensive. Since the bond yield has now become attractive, FPI selling has increased in the debt market. Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors, said that along with cyclical improvement in corporate earnings, and strength in GDP growth, it will also have to be seen how much the government spends on infrastructure projects. Overall, foreign investors currently seem cautious about the Indian market. During 2023, foreign investors had invested Rs 1.71 lakh crore in the Indian market. Whereas, before this, in 2022, this investment was Rs 1.21 lakh crore.