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In the first week of December, foreign investors rapidly withdrew money from the Indian stock market. The fall of the rupee and global uncertainties have further increased the uneasiness of investors. However, strong buying by domestic investors saved the market from a major shock.
New Delhi. The beginning of December has been weak for the Indian stock markets. Foreign portfolio investors (FPIs) withdrew Rs 11,820 crore in the first week alone, which has increased the concern of investors. In November also, FPIs had sold Rs 3,765 crore, and now the total outflow in 2025 has reached Rs 1.55 lakh crore. Sharp fall in rupee and global economic uncertainty are being said to be the main reasons for this selling.
Rupee’s decline became a major reason
According to analysts, about 5 percent weakness in the rupee this year is the biggest concern of foreign investors. Experts say that whenever pressure on the rupee increases, foreign investors reduce their holdings. Along with this, December is the season of global portfolio re-balancing, when foreign investors reduce their positions before the holidays. At the same time, the delay in India-US trade deal has also weakened the sentiment.
DIIs handled the market decline
Amid heavy selling by FPIs, domestic investors have emerged as the biggest force in the market. DIIs made strong purchases of Rs 19,783 crore during the same period, which prevented any major fall in the market. Strong GDP data, improved corporate earnings expectations and RBI’s 25 basis point rate cut on December 5 have boosted the confidence of domestic investors. On the day of rate cut, FPIs also remained positive for one day and purchased Rs 642 crore.
What next? Relief may increase due to global rate cut
Relief is expected from global markets in the coming days. According to experts, there is a possibility of a 25 basis point rate cut by the US Central Bank Federal Reserve next week, which is usually a positive sign for risky assets. India can also take advantage of this, although the delay in the India-US trade deal remains a cause of concern for foreign investors. At the same time, FPIs have invested Rs 250 crore in the debt market, while withdrawal of Rs 69 crore was also seen.
