Foreign Portfolio Investors (FPIs) withdrew ₹12,941.34 crore from the Indian markets during the week ending December 12, 2025, intensifying selling pressure across the equity and debt segments, as global headwinds and domestic currency weakness weighed on investor sentiment.
The weekly outflow comprised ₹6,135.33 crore from equities and ₹6,891.47 crore from debt markets, while hybrid instruments saw marginal inflows of ₹166.58 crore, according to data from the National Securities Depository Ltd (NSDL). The selling was most pronounced on December 10, when FPIs pulled out ₹5,386.69 crore in a single day, marking the sharpest daily outflow of the week.
“Foreign Institutional Investors remained net sellers in the Indian equity markets, withdrawing $681.24 million through the week,” said Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India. “The sustained outflow reflected a cautious global risk environment driven by elevated US interest rates, tighter liquidity conditions, and a continued preference for safer or higher-yielding developed-market assets.”
On a daily basis, FPIs recorded net outflows of ₹1,590.69 crore on December 8, ₹1,397.90 crore on December 9, ₹5,386.69 crore on December 10, ₹1,369.92 crore on December 11, and ₹3,196.14 crore on December 12. The cumulative equity outflow across the five trading days stood at ₹6,135.33 crore, with the stock exchange segment bearing the brunt at ₹8,701.42 crore in net sales, partially offset by ₹2,566.09 crore inflows through primary market and other routes.
Debt markets witnessed persistent selling across all categories, with the Fully Accessible Route (FAR) recording the highest outflows of ₹7,487.52 crore for the week. The Debt-General Limit saw net outflows of ₹530.52 crore, while the Debt-VRR segment recorded net outflows of ₹175.38 crore. Mutual fund schemes also experienced withdrawals of ₹81.46 crore during the week.
“The sharp depreciation of the Indian rupee, which has weakened to record levels in recent weeks, further dampened foreign investor sentiment as currency losses eroded dollar-based returns,” Srivastava added. “Additionally, rich domestic equity valuations made India less attractive relative to other emerging markets that currently offer better value.”
The rupee traded in the range of ₹89.88 to ₹90.37 per US dollar during the week, with currency weakness adding to FPI concerns. The conversion rate stood at ₹90.37 per dollar on December 12, reflecting continued pressure on the domestic currency.
Shrikant Chouhan, Head Equity Research, Kotak Securities, noted that global markets were pricing in monetary policy developments. “Global equity markets priced in a 25-bps cut in the Federal Funds rate by the US Fed, projections of one rate cut in CY26, and continued optimism on global AI,” he said. “In India, the RBI MPC unanimously reduced the policy repo rate by 25 bps to 5.25%, while the policy stance was maintained at ‘neutral’.”
Despite the challenging environment for foreign flows, Chouhan pointed to resilience in domestic capital markets. “Nonetheless, primary market activity continued to be robust in India,” he said. “FPI flows are expected to remain volatile.”
The week’s selling pressure was accompanied by significant activity in derivative markets, with index options recording gross buy values of ₹14,972,310.20 crore and gross sell values of ₹15,063,183.52 crore across the five trading days.
“Broader concerns around global growth uncertainty, geopolitical tensions, and shifting allocations toward global tech and US markets also contributed to the selling pressure,” Srivastava said. “Despite resilient domestic fundamentals, FIIs maintained a defensive stance, leading to another week of net outflows from Indian equities.”
Published on December 13, 2025
