Foreign Portfolio Investors (FPIs) continued their selling streak on September 26, withdrawing ₹3,726.82 crore from Indian markets. This marks the fifth consecutive session of net outflows, totaling ₹15,096.22 crore for the week ending September 26, 2025.
The latest outflows were primarily driven by equity sell-offs, with FPIs recording net sales of ₹4,100.60 crore in equity markets on Thursday. This brought the week’s total equity outflows to ₹12,734.24 crore, indicating persistent foreign investor pessimism amid uncertainties in trade policy.
“FIIs continued to be net cash sellers to the tune of ₹24,454.10 crore as of September 2025 (to date),” stated Shrikant Chouhan, Head Equity Research at Kotak Securities.
The week began with FPIs investing ₹3,115.25 crore on September 22. However, sentiment quickly shifted to negative, leading to outflows of ₹2,654.95 crore on September 23, ₹1,485.95 crore on September 24, ₹4,103.25 crore on September 25, and ₹3,726.82 crore on September 26.
Debt markets offered some respite, with net inflows of ₹430.64 crore on Thursday, largely driven by Debt-VRR investments amounting to ₹864.42 crore. However, these inflows were partially offset by net sales in other debt categories, particularly Debt-FAR, which saw outflows of ₹424.92 crore.
The rupee’s continuing weakness has raised investor concerns, as the USD-INR exchange rate reached 88.6696 on September 26, compared to 88.3055 on September 22. “The rupee has slipped to all-time lows, and a break below 89 could further dent sentiment,” noted Santosh Meena, Head of Research at Swastika Investmart.
Mutual fund investments also declined, with FPIs pulling out ₹80.75 crore on Thursday after outflows of ₹390.32 crore on September 25. The week’s total mutual fund outflows reached ₹608.14 crore, predominantly from equity schemes.
Chouhan highlighted key factors behind sustained selling pressure, stating, “US announcements of ‘stricter’ norms on H1B visas, coupled with further headwinds from the US implementing 100 percent tariffs on branded or patented pharmaceutical products, have influenced market dynamics.”
FPI activity on stock exchanges for Thursday comprised ₹19,634.75 crore in gross purchases and ₹23,280.82 crore in gross sales. In contrast, primary market and other investments remained limited, with gross purchases totaling just ₹29.31 crore.
The derivatives market showed increased activity, with FPIs executing over 14.6 million contracts across various instruments on September 26. Index options were the most traded segment, with 11.7 million contracts executed on both buy and sell sides, while stock futures saw significant trading with over 2.18 million contracts.
“FPI flows are expected to remain volatile,” Chouhan added, reflecting ongoing uncertainties regarding future investment patterns amid trade tensions and policy changes.
Market experts remain divided on the near-term outlook. “Looking ahead, investor attention will focus on upcoming US economic indicators, particularly inflation and employment data. Domestically, the RBI’s policy decision and industrial production figures will play a crucial role in shaping sentiment,” said Vinod Nair, Head of Research at Geojit Investments Limited.
The consistent FPI outflows have contributed to broader market weakness, with both the Nifty and Sensex declining about 2.7 percent for the week. “Ultimately, FII flows remain the key determinant for market trends,” Meena concluded, underscoring the critical impact of foreign investment flows on market direction.
Published on September 27, 2025
