Foreign institutional investors (FIIs) sold equities worth ₹15,959 crore through the exchanges in December so far, but the selling was completely eclipsed by domestic institutional investors (DIIs) buying of ₹39,965 crore during the same period, data compiled by Geojit Investments showed.

In the calendar year 2025, foreign portfolio investor (FII) have sold ₹1.58 lakh crore worth of Indian equities, making it one of the weakest years for foreign flows since 2021. On the other hand, domestic investors have added ₹7.13 lakh crore to equities, comfortably offsetting foreign outflows, thereby avoiding any market disruptions.

Steady inflows from retail investors into mutual fund systematic investment plans (SIPs) have emerged as a key stabilising force for Indian equities, offsetting sustained FII selling in December, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

Monthly SIP inflows have remained consistently above ₹29,000 crore over the past three months, significantly strengthening DIIs in the ongoing FII versus DII tussle. This steady domestic participation has enabled DIIs to absorb continued FII outflows without destabilising the market.

FIIs have been net sellers throughout December so far, selling equities on every trading day. However, Vijayakumar said sustained selling by foreign investors may not be viable in the current environment, especially given robust retail participation, improving economic fundamentals and a favourable earnings outlook.

“In December so far, FIIs have sold equities worth ₹15,959 crore through the exchanges. This selling has been completely eclipsed by DII buying of ₹39,965 crore during the same period,” he noted.

According to Vijayakumar, several factors currently weighing on market sentiment—including rupee depreciation, persistent FII selling, delays in finalising the US–India trade deal, and ongoing global AI-related trade tensions—are largely temporary in nature.

“The most important factor that will ultimately dictate the direction of the market is earnings growth, and this looks promising for FY27,” he said.

He added that maintaining heavy short positions while continuing aggressive selling becomes increasingly difficult for FIIs when domestic liquidity remains strong and corporate earnings prospects are improving. Sustained selling in a market where growth and earnings visibility remain bright is unlikely to be a long-term strategy.

Going forward, Vijayakumar expects FII selling pressure to ease in the coming months as global investors reassess India’s medium-term growth and earnings potential.

The foreign investors are steadily losing ground in India’s stock markets. Foreign portfolio investors (FPIs) now own just 16.9% of NSE-listed companies—their lowest share in over 15 years, as of September 2025. The decline continues a trend that began in early 2023 and shows little sign of reversing.