Why Is FII Selling Slowing Down Amid India's Market Rally?
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Synopsis
In a surprising twist, foreign institutional investors are reducing their selling amid a strong rally in the Indian market. With key indices showing bullish trends and corporate earnings poised for growth, will this lead to a reversal in investor sentiment? Find out the latest developments and expert insights in this compelling analysis.
Key Takeaways
- FIIs have slowed their selling amid a market rally.
- The Nifty index has gained 213 points recently.
- FIIs remain net sellers, offloading Rs 9,503 crore in September.
- Analysts predict over 15 percent growth in corporate earnings for FY27.
- The index shows a bullish trend, trading above key moving averages.
New Delhi, Sep 21 (NationPress) Foreign institutional investors have reduced their selling activity as the Indian market witnesses a robust rally, although they remain net sellers in September, having divested Rs 9,503 crore this month. The Nifty index has shown impressive bullish momentum recently, gaining 213 points and concluding at 25,327, which resulted in the formation of a bullish candle, indicating gains for the third consecutive week.
Notably, FIIs have been actively purchasing in the primary market despite their selling in exchanges, with acquisitions totaling Rs 1,559 crore in equities for September, as stated by Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments.
In 2025, FIIs have liquidated Rs 180,443 crore worth of equities, significantly higher than the Rs 121,210 crore sold in 2024, according to the analyst.
This substantial sell-off has not severely impacted the market, given that DIIs have more than compensated for FII selling through their continued purchases.
FIIs' total buying in the primary market has reached Rs 41,865 crore in 2025. Vijayakumar explained that this unusual pattern of selling secondary market shares while acquiring primary ones stems from perceived overvaluation in India's stock market.
The sell-off, prompted by underwhelming earnings, inflated valuations, and uncertainty surrounding US tariffs, has led to stagnant indices.
FIIs have found profitability in selling within India while investing in other markets such as Hong Kong, Taiwan, and South Korea this year; however, this trend may shift in the near future.
On the weekly chart, the index has formed a cup and handle pattern, and a decisive breakout from this formation, bolstered by rising volumes, could indicate potential for continued upside, analysts suggest.
Moreover, the index trades above its crucial moving averages—the 20-day, 50-day, and 200-day EMAs—which further affirms the prevailing bullish sentiment.
Experts anticipate a strong likelihood of over 15 percent growth in corporate earnings for FY27, which could lead to a positive shift in FPI sentiments.
Point of View
It is crucial to maintain an unbiased perspective while reporting on financial markets. The recent trends in FII selling and DII buying highlight the ongoing complexities in India's financial landscape. We must remain vigilant in analyzing these shifts, ensuring that our reporting serves the interests of our readers and stakeholders. NationPress commits to providing accurate and timely updates that empower our audience with knowledge.
NationPress
22/09/2025
Frequently Asked Questions
What is the current trend of FII selling in India?
Foreign institutional investors are slowing their selling activities amid a market rally, having sold Rs 9,503 crore in September.
How has the Nifty index performed recently?
The Nifty index has gained 213 points this past week, closing at 25,327 and forming a bullish candle.
Are FIIs buying in the primary market despite selling in the secondary market?
Yes, FIIs have purchased Rs 1,559 crore worth of equities in the primary market in September while selling in the secondary market.
What do analysts predict for corporate earnings in FY27?
Analysts expect corporate earnings to grow by over 15 percent in FY27, which could positively impact FPI sentiments.
What is the significance of the cup and handle pattern in the index?
The cup and handle pattern suggests potential for further price increases, particularly if a breakout occurs with increasing volumes.
