Foreign investors are showing no signs of relenting in their equity sell-off from Indian markets. Experts predict sustained FII outflows until definitive bullish signals emerge on multiple fronts.
The latest numbers paint a grim picture: FIIs have dumped ₹22,000 crore worth of shares over the past 15 days. This relentless selling has pushed benchmark indices into correction territory and triggered widespread panic among retail participants.
‘Without positive triggers like falling crude prices, rupee appreciation, or favorable global cues, FII selling will remain a persistent headwind,’ opined Priya Sharma, Senior Market Strategist at Global Finance Advisors.
Global factors are dominating the narrative. The US dollar’s strength, coupled with hawkish rhetoric from Fed officials, continues to pressure emerging market currencies and assets. India’s relatively high valuations compared to peers have made it an easy target for profit booking.
Domestic institutions have provided some counterbalance, with mutual funds and insurance companies collectively buying ₹12,300 crore. Yet, this defensive buying cannot offset the magnitude of foreign outflows.
Technical charts present a bearish outlook. The Nifty has broken crucial support levels and now faces resistance at its 200-day moving average. Volatility index VIX has spiked 35%, signaling heightened uncertainty.
Investors should watch these critical levels: sustained Nifty trading below 23,500 could trigger accelerated selling, while a decisive move above 24,500 might signal FII interest returning. Corporate earnings season, starting next week, offers the first real test of market resilience.
For now, the message from Street veterans is clear: brace for more volatility until positive signals materialize. Selective buying in beaten-down sectors like banking and IT may offer tactical opportunities amidst the downturn.