Foreign portfolio investors (FPIs) have pulled out more than Rs 22,530 crore from Indian stocks so far in the month of January. The main reasons for this are the increase in US bond yields and the strengthening of the dollar. In the year 2025, FPI had sold Rs 1.66 lakh crore in the Indian equity market. This was due to currency volatility, global trade tensions and fears of US tariff increases, and high market valuations. The value of the rupee declined by about 5 percent against the dollar during 2025. Continuous selling by FPI played an important role in this.
According to NSDL data, FPIs pulled out Rs 22,530 crore from Indian equities between January 1 and 16. Market experts have attributed this withdrawal to global and domestic factors. According to news agency PTI, Sachin Jasuja, equity head and founding partner of Centricity Wealthtech, said that rising yields on US bonds and a strong dollar have improved risk adjusted returns in developed markets. In such a situation, capital is leaving emerging markets and going towards other markets.
Himanshu Srivastava, principal manager-research, Morningstar Investment Research India, said increased yields on US bonds and the strength of the dollar have made US assets comparatively more attractive. Geopolitical and trade uncertainties continue to weigh on investors’ risk appetite towards emerging markets.
These factors are also the reason
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, says that the uncertainty regarding the US-India trade agreement has also weakened the sentiment of investors. On the domestic front, extremely high valuations in some market segments, coupled with mixed signals from the ongoing earnings season, have led to foreign investors booking profits. Also the portfolio has been rebalanced. Vijayakumar said that unless a clear positive trigger is found for the market rally, this selling trend may continue.