Stock Market: Foreign investors' selling is not stopping, what is the reason?:

News Topical, Digital Desk : Foreign investors are continuing to withdraw money from the Indian stock market on a large scale. So far in the year 2025, there has been record selling from the secondary market, while four months of the year are still left. According to experts, fears about tariffs, pressure on the income of companies and the expectation of attractive returns from other markets are the main reasons for this selling.

What has happened so far

Foreign institutional investors have sold shares worth more than Rs 1.5 lakh crore in the domestic market since January. The process of selling by them continues unabated. This selling is not having much effect on the buying by domestic investors. According to experts, foreign investors are working on a strategy of quick profit extraction instead of a strategy of staying here for a long time in the hope of better returns in other countries. So far in 2025, Sensex and Nifty have increased by only 3.5%. In comparison, America's S&P 500 and Nasdaq rose 12%, Europe's major indices climbed above 20%, Japan's Nikkei rose 18% and Hong Kong's Hang Seng rose by 29%. This is the reason why foreign investors are withdrawing money from here.

What is the opinion of experts In a news of Moneycontrol, Sunny Agarwal of SBI Securities says that the indication of US-China trade agreement is also a reason for FIIs to leave India. The Indian market is trading at an average of 20 times the estimated earnings, while China's level is only 11.7 times. This means that the Indian market looks expensive and China looks cheap. Trump has imposed strict tariffs on India, although Trump's stance on China is not strict, its effect is also visible to the investors. Sahil Shah of Equirus Asset Management warned that if the US policy changes against India, it may affect the exports.

Why the interest in IPO? Despite withdrawing money from the secondary market, FIIs are investing in the primary market i.e. IPO. Actually, there is an initial profit of up to 15–20% and some companies have unique business models, in which foreign investors are ready to invest for a long time.

What next? Experts believe that there is no hope of much growth in the Indian market in the next 6–9 months. Investors are being advised to be cautious and adopt a cautious strategy.