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1. Reversal After a Three-Month Buying Streak
Foreign portfolio investors (FPIs) have turned net sellers in Indian equities this July, ending a steady inflow trend seen since April.
- Between July 1 and July 18, FPIs offloaded Rs 10,775 crore from the secondary market
- Most of the selling—Rs 10,219 crore—occurred in just five sessions between July 14 and 18
- This marks a sharp pivot from June’s Rs 14,590 crore inflow
2. Mixed Signals: Primary Market Still Attractive
Despite the exit from secondary markets, FPIs remain active in IPOs and QIPs.
- Rs 5,251 crore invested in the primary market during the same period
- Analysts suggest FPIs are chasing fairer valuations in new issuances
3. What’s Driving the Pullback?
Multiple factors are contributing to the cautious sentiment:
- Elevated stock valuations and underperformance relative to other emerging markets
- Uncertainty around US-India trade negotiations and tariff deadlines
- Mixed corporate earnings, especially in financial and IT sectors
- Global cues and stronger US assets prompting profit booking
4. Domestic Investors Hold the Fort
While FPIs retreat, domestic institutional investors (DIIs) continue to support the market.
- DIIs have been net buyers for 24 consecutive months
- In July alone, DIIs pumped in Rs 21,893 crore—more than double the FPI outflows
Sources: Outlook Money, Economic Times, ABP Live, Goodreturns, Outlook Business, The Hans India, MSN India
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