Foreign Portfolio Investors (FPIs) have begun March with a strong move, offloading Indian equities worth a staggering Rs 30,015 crore, demonstrating a persistence in FPI strategy that marks 2024 as a year of significant outflows totaling Rs 1,42,616 crore. This financial upheaval leaves many pondering on the underlying reasons.

A Strong Sell-Off in January and February

This trend started earlier in the year, as January saw a massive Rs 78,027 crore in sell-offs followed by Rs 34,574 crore in February, creating a backdrop of tension in the Indian market. Market analysis indicates a continuing shift in global investment patterns, with implications that extend beyond the Indian market’s borders.

Celebrations and Market Movement

Even while the Holi festival gave traders a break, the market activity remained dynamic. Before this pause, Thursday’s trading illustrated the prevailing trend: FPIs offloaded stocks worth Rs 793 crore, while Domestic Institutional Investors (DIIs) countered with net buying worth Rs 1,724 crore.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, shares a nuanced perspective on these shifts. He notes a tempering in the intensity of FPI selling, suggesting valuations are becoming relatively more attractive again. Despite this, significant fund diversion to Chinese markets remains prominent.

Outflows Redirected to Chinese Equities

Indian equity outflows are finding new homes in Chinese portfolios, given their strong performance in 2025. This is juxtaposed against a backdrop of geopolitical tensions and a weakened dollar index which traditionally moderate fund flow towards the US.

The Broader Economic Landscape

According to The Economic Times, the ongoing trade tensions involving the US continue to direct investor interests towards perceived safer assets like gold and dollar. This suggests a potentially sustained period of volatility as global strategies adjust and stabilize in response to these economic pressures.

Weekly Market Snapshot

Fluttering from these broader market movements, the Nifty ended Thursday at 22,397.2, reflecting a decline of 73.30 points or 0.33%. Weekly metrics showed a 0.7% downturn, with sector-specific performance adding another layer to the evolving market narrative.

This ongoing transformation in FPI behavior highlights a global re-evaluation of risk and opportunity that could redefine market dynamics for the foreseeable future.