FIIs remained net sellers, extending their recent selling trends as tariff-related uncertainties and geopolitical tensions offset the optimism from better-than-expected Q3 earnings by select large-cap IT companies, said Ajit Mishra, Senior Vice President, Research at Religare Broking.
Given the mixed domestic and global backdrop and persistent foreign fund outflows, it is essential to manage leverage and position sizes prudently, he recommended.
The FIIs were net sellers in December, offloading domestic shares worth Rs 22,611 crore during the month while taking total outflows in 2025 to Rs 1,66,286 crore.
FIIs sold shares worth Rs 11,766 crore in Q3 after offloading shares worth Rs 76,619 crore in the third quarter of CY25. They reversed the buying trends seen in the April–June period when inflows totalled Rs 38,673 crore. The year had opened on a sharply negative note, with foreign investors pulling out a massive Rs 1,16,574 crore during the January–March quarter.
Market expert V K Vijayakumar blames the relatively elevated valuations in India and the AI trade as major factors behind the FII exodus in the year gone by. Their sustained selling has also contributed towards a significant drop in Indian rupee against the US dollar, the Chief Investment Strategist at Geojit Investments said.
On Nifty’s likely moves, next week, Mishra of Religare said that a decisive break from the prevailing consolidation range would offer cues for the next directional move. He said that market participants should focus on quality large-cap and larger midcap stocks, particularly in sectors with stronger earnings visibility and institutional interest. For him, IT, metals, and select PSU names remain preferred sectors. Exposure to rate-sensitive sectors like realty and capital goods should remain limited, he added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
