Foreign portfolio investors (FPIs) have turned increasingly bearish on Indian equities, pulling out a massive ₹1.8 trillion over the past year. The sectors hit the hardest? Oil & gas, information technology (IT), and auto — three of India’s biggest market movers.
Data from Prime Database shows that FPIs sold oil & gas stocks worth ₹57,207 crore, IT stocks worth ₹53,352 crore, and auto stocks worth ₹35,292 crore. Together, these three sectors accounted for nearly 80% of the total foreign sell-off, or about ₹1.45 trillion, signaling a sharp shift in investor sentiment.
This comes after Indian equities touched record highs a year ago, with the Nifty climbing to 26,277 points and the Sensex nearing 86,000. Since then, both indices have struggled to hold momentum, with volatility rising amid global macroeconomic concerns, fluctuating oil prices, and fears of slowing global tech demand.
Market experts believe FPIs are rebalancing their portfolios, moving away from India’s traditional heavyweight sectors and looking toward opportunities in emerging markets and other asset classes. Weak global IT spending has dented growth projections for India’s top software exporters, while fluctuating crude prices and regulatory concerns have weighed on oil & gas companies. The auto sector, despite showing signs of recovery in domestic demand, has faced challenges from high input costs and slower exports.
For Indian investors, the pullback raises critical questions: are FPIs losing faith in India’s growth story, or is this a temporary repositioning ahead of fresh inflows? Domestic institutional investors (DIIs) have stepped in to absorb some of the selling pressure, but analysts caution that sustained outflows could cap further upside for benchmark indices.
Still, India remains one of the fastest-growing major economies, and many believe the current phase could offer long-term buying opportunities for retail investors. With valuations cooling off in sectors like IT and auto, bargain hunters may find attractive entry points if earnings outlooks improve.
The big question now is whether FPIs will return to Indian equities in the coming quarters, especially with global interest rate cuts on the horizon and India’s economy projected to stay resilient. Until then, market watchers expect continued choppiness, with oil, IT, and auto stocks likely to remain under pressure.
