FPIs pull out Rs 4,784 crore from Indian equities this week amid volatile bond market

MUMBAI: Foreign Portfolio Investors (FPIs) turned net sellers in the Indian equity markets this week, offloading shares worth Rs 4,784.32 crore between May 19 and May 23, according to data released by the National Securities Depository Ltd (NSDL).

This selling has significantly reduced the net inflows for the month of May. As of this week, the total FPI investment in May stands at Rs 13,835 crore, down from Rs 18,620 crore recorded till the previous week. This indicates that nearly Rs 4,800 crore of investments were pulled out by foreign investors in just five trading sessions.

The sharpest selling was witnessed on Wednesday, May 21, when FPIs sold shares worth over Rs 10,000 crore in a single day. However, the week had started on a positive note, with good inflows recorded on Monday and Tuesday.

With this week’s outflows, the cumulative net investment by foreign investors in Indian equities for the year 2025 now stands at a net outflow of Rs 98,516 crore. The data indicates that foreign funds continue to remain cautious amid global uncertainty.

Experts suggest that this selling trend may not be due to any fundamental issues within the Indian markets, but more likely reflects external pressures. One key reason could be the ongoing turmoil in global bond markets.

Ajay Bagga, banking and market expert, said, “This one of an up down flow points to the turmoil in global bond markets impacting leveraged funds or carry trade funds to pull out some profits from the Indian markets to cover liquidity needs elsewhere”.

He further added, “Another possibility is the gaming of option pricing by FPIs who came to move option premiums by buying and selling the underlying shares in the cash markets. That may explain why index heavyweights saw selling on particular days and why sharp reversals happened in the markets on two days”.

Analysts are viewing these outflows as instances of “hot money” movement, quick, speculative investments, rather than any sign of weakening fundamentals in the Indian economy. The NSDL data further highlighted that net investments by FPIs in Indian equities stood at Rs 4,223 crore during April, indicated a turnaround in foreign investment trends.

In previous months data also showed that FPIs had sold stocks worth Rs 3,973 crore in March. In January and February, they had sold equities worth Rs 78,027 crore and Rs 34,574 crore, respectively. (ANI)