Stock Market: Foreign investors started selling again, withdrew huge amount from the market

Foreign investors who invested in the domestic market in the last week of the last financial year have once again started selling. In the 4 sessions of the first week of April 2025, foreign portfolio investors (FPIs) have made a huge withdrawal of Rs 10355 crore from the Indian stock market. This selling has been seen in only four trading sessions between April 1 and 4. Experts believe that this move is the result of the new tariffs imposed by the US, which have been implemented on most countries including India.

Earlier, between March 21 and 28, investors had invested Rs 30,927 crore in Indian stocks, limiting the total net outflow for the month of March to Rs 3,973 crore. However, investor sentiment remained weak in January and February 2025 as well, when foreign investors withdrew Rs 78,027 crore in January and Rs 34,574 crore in February.

Uncertainty in financial markets BDO India partner and FS tax leader Manoj Purohit says that this sudden change reflects the volatility and fragile state of the global equity market. Investors are now also keeping an eye on the upcoming policy of the Reserve Bank of India and possible interest rate cuts. The total withdrawal of foreign investors since the beginning of 2025 has reached Rs 1.27 lakh crore, giving worrying signals. Impact of US policy According to VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the tariffs imposed by the US on imports are much stricter than expected. These include a 10% baseline tariff on all imports, a 25% duty on automobiles and a 26% tariff on Indian goods. These have raised the risk of inflation in the US and stagflation i.e. inflation along with recession. Due to these apprehensions, a huge decline was also seen in the US stock markets. In just two days, the S&P 500 and Nasdaq recorded a decline of more than 10%. Hope of relief for emerging markets like India However, the decline in the dollar index is being considered a positive sign for emerging markets like India. This may provide some relief in capital flow. 

Read More: Greed and Fear: Jefferies' Chris Wood's confidence in India increased, here are 5 reasons Limited Trump ta