Mumbai’s bustling stock market is facing renewed pressure as Foreign Institutional Investors (FIIs) continue their aggressive selling spree. Analysts warn that this trend could drag on until clear positive indicators surface in the market.
Recent data reveals FIIs offloading over ₹15,000 crore worth of Indian equities in the past week alone. This marks the third consecutive week of net outflows, raising alarms among domestic investors. ‘The selling pressure from FIIs will likely persist until we see concrete signs of economic recovery and global stability,’ stated Rajesh Mishra, Head of Research at Apex Capital Markets.
Several factors are fueling this exodus. Rising US Treasury yields have made American bonds more attractive, drawing foreign capital away from emerging markets like India. Geopolitical tensions in the Middle East and uncertainty surrounding upcoming US Federal Reserve decisions have further dampened risk appetite.
Domestic mutual funds have stepped in to absorb some of the selling, purchasing ₹8,500 crore during the same period. However, experts caution that retail investor participation alone cannot sustain the market’s current valuations.
Market breadth has deteriorated sharply, with more stocks hitting lower circuits than upper ones. The Nifty 50 index has shed nearly 4% in the past fortnight, while midcap and smallcap indices have plunged even deeper.
Analysts point to key triggers that could reverse the tide. A softer-than-expected US inflation print, dovish Fed commentary, or strong Q3 corporate earnings from Indian companies could prompt FIIs to return. Until then, investors are advised to stay cautious and focus on quality large-cap names.
The benchmark indices opened weak today, reflecting continued foreign selling pressure. With no immediate positive catalysts visible, the market remains vulnerable to further downside in the near term.