In just over three months, they have pulled $18.84 billion from local shares, edging past the full-year record outflow of $18.79 billion seen in 2025, according to Central Depository Services India
BSE Sensex fell 900 pts intraday and Nifty slipped below 23,800 amid US-Iran tensions, oil surge, and FII selling. Here are 6 key reasons that are driving today's stock market decline.
FIIs have turned cautious on Indian equities, selling ₹1.07 trillion amid Iran war risks. BNP Paribas flags oil, inflation, CAD and earnings concerns.
Analysts expect FIIs to stay cautious on Indian equities in H1FY27 as global risks weigh. They, however, see flows returning in H2FY27. Strong DII inflows could also support Indian markets.
For FII's, the favored markets over last two years have been countries that were beneficiaries of new age tech and artificial intelligence (AI), he said.
The BSE benchmark fell around 659 points to hit a low of 81,589 against the previous close of 82,258.66. Likewise, the NSE Nifty index dropped 228 points to touch a low of 25,268
Heavy selling in defensive and consumption-related industries like FMCG, healthcare, and consumer services drove the January outflows
The BSE Sensex tumbled 803 points in the intraday to hit a low of 84,909, and the NSE Nifty50 also slipped below the 26,000 mark in the intraday to hit a low of 25,902.95
The strong domestic flow, meanwhile, offset the selling by foreign portfolio investors (FPIs) during CY25, who pulled out $23.3 billion (Rs 2.03 trillion) from the domestic equity markets.
The near-record selling by foreign investors has come at a time when policymakers have already played their best cards, for now, analysts opine.
Stock market crash: The Sensex fell 827.27 points, or 1.01 per cent, to an intraday low of 80,332.41, while the Nifty50 dropped 261.4 points, or 1.05 per cent, to 24,629.45 levels.
Kotak Securities said that $90 billion of DII inflows and a flat market show that flows alone don't drive markets
Thus far in calendar year 2025 (CY25), foreign institutional investors have dumped Indian equities worth Rs 1.17 trillion, shows NSDL data
DIIs - which include mutual funds, insurance companies, and pension funds -- poured $19.7 billion into Indian stocks last quarter, far ahead of the $5.4 billion invested by FIIs.
Indian Rupee outlook: Analysts suggest that the local unit might largely stay range-bound between 86.50 to 88.50 levels
Analysts have largely attributed the selloff to the trade uncertainty triggered by Donald Trump's tariff-related policies
Why stock markets are falling: US Trump tariffs, F&O expiry, and FII selling are some of the reasons why Sensex, Nifty are down today
FIIs biggest investment was in the BFSI sector in June 2025, followed by Oil and Gas, and Automobile sectors
The benchmark Nifty50 index has risen by 5.92 per cent, while the 30-stock Sensex has advanced 5.01 per cent, so far in H1-CY25
The renewed interest by FIIs in Indian stock markets could be a one-off, said market analysts, who expect flows - both domestic and foreign - to remain volatile going ahead depending on news flow