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DIIs Counter FII Sell-off: India Market Resilience Shines
6 Dec
Summary
- Foreign investors offloaded ₹11,820 crore in early December.
- Domestic investors bought ₹19,783 crore equities in the same period.
- Rupee depreciation is a key driver for foreign selling.
In the initial week of December, Foreign Institutional Investors (FIIs) divested Indian equities worth ₹11,820 crore, extending a trend of significant outflows observed throughout 2025. This sustained selling pressure is largely attributed to the rupee's sharp depreciation of approximately 5% this year, prompting foreign investors to repatriate funds. The cumulative FII selling in 2025 has reached ₹1,55,495 crore.
Despite the persistent FII sell-off, the Indian equity market has demonstrated remarkable resilience, primarily driven by substantial inflows from Domestic Institutional Investors (DIIs). DIIs were net buyers, injecting ₹19,783 crore into equities during the same early December period, thereby eclipsing the outflows. This robust domestic buying is fueled by optimism surrounding India's strong GDP growth figures and anticipated upticks in corporate earnings.
Experts anticipate that FII selling may continue as valuations are still perceived as high. However, proactive measures such as the Reserve Bank of India's 25 basis points rate cut and planned liquidity infusions are expected to bolster market sentiment. Coupled with pro-growth fiscal and monetary policies, these factors are likely to encourage continued DII investment and support market stability.
