Overview

• Foreign portfolio investors sold Rs 12,257 crore of equities in the first week of September, according to depository data.
• The latest pullback follows net outflows of Rs 34,990 crore in August and Rs 17,700 crore in July, taking 2025 equity sales to roughly Rs 1.43 lakh crore.
• Analysts point to a firmer US dollar, renewed US tariff threats, and persistent geopolitical tensions as the main external triggers.
• Slowing earnings and premium valuations in India prompted profit booking, while strong domestic institutional buying let FPIs rotate to cheaper markets such as China, Hong Kong, and South Korea.
• FPIs were selective in debt, investing Rs 1,978 crore in the general category while pulling Rs 993 crore from the voluntary retention route, with near-term flows seen hinging on upcoming Fed signals, US labour data, and the RBI’s stance.