Commenting on current trends, VK Vijayakumar, chief investment strategist at Geojit Investments, termed the purchase as a turnaround in the number of foreign investors by the end of 2025, although he said FIIs have continued to invest in domestic equities through the primary markets despite selling in the secondary markets.
FII outflows and trade deficit have had a continued negative impact on the Indian rupee, which has emerged as the worst-performing currency in Asia and is set to fall nearly 5% in 2025, Vijayakumar said.
“However, the last two days witnessed a reversal in the currency’s devaluation. The rupee bounced back from a low of 91.14 to the dollar on December 16 to 89.29 on December 19. This strengthening of the currency also helped stem the tide of FII selling,” the Geojit analyst said.
He remains positive on the return of financial institutions to India by 2026, supported by steady GDP growth and improving corporate earnings growth.
After strong inflows of Rs 14,610 crore in October, November saw a sell-off worth Rs 3,765 crore. In the third quarter (July-September) of CY25, FIIs sold shares worth Rs 76,619 crore, reversing purchases in the April-June period when inflows totaled Rs 38,673 crore. The year started on a sharp negative note with foreign investors pulling out a huge Rs 1,16,574 crore in the January-March quarter.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
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