Foreign Portfolio Investors (FPIs) turned net sellers in the Indian equity market on Monday, offloading shares worth ₹36.00 crore as the benchmark Nifty 50 index retreated from record highs. This marked a sharp reversal from the previous session when overseas investors were net buyers with purchases worth ₹290.00 crore.

Market Performance and FPI Activity

The Nifty 50 index closed at 26,250.30, declining 0.30% from the previous session despite touching a fresh peak of 26,373.20 during intraday trading. The index had closed at an all-time high on Friday, but witnessed mild cooling toward the close on Monday.

Broader FPI Outflow Trend

The Monday selling adds to the significant outflow trend from Foreign Portfolio Investors (FPIs) in recent periods. Overseas funds have withdrawn nearly ₹7,000.00 crore in just the first three days of 2025, continuing the substantial outflow pattern observed in the previous year when they net offloaded Indian equities worth ₹1.66 lakh crore or $19.00 billion.

In contrast to FPI selling, domestic institutional investors remained net buyers, purchasing shares worth ₹1,764.00 crore, providing some support to the market.

Sectoral Performance and Market Sentiment

Market sentiment reflected mixed signals as optimism over healthy third quarter business updates from financials and other companies was tempered by caution surrounding implications of US military action in Venezuela. The broader market indices showed varied performance during the session.

The Nifty Smallcap100 outperformed the broader market, gaining 0.50%, while the Nifty Midcap100 ended 0.20% lower, reflecting selective buying interest in smaller capitalization stocks despite the overall cautious sentiment.

Foreign Portfolio Investors (FPIs) maintained their selling momentum for the sixth consecutive session on Tuesday, offloading Indian equities worth ₹3,844.02 crore according to provisional data from the National Stock Exchange (NSE). This sustained outflow reflects continued foreign investor caution as the year draws to a close.

Recent FPI Activity Trends

The Tuesday sell-off follows Monday's equity disposal worth ₹2,759.89 crore, indicating accelerating outflow pressure. The previous week witnessed consistent FPI selling exceeding ₹4,500 crore, marking a sharp reversal from the week prior when overseas investors were net buyers for three consecutive sessions.

Year-to-Date FPI Outflows

According to National Securities Data Ltd. (NSDL), FPIs have net offloaded Indian equities worth ₹1.62 lakh crore in 2025. The selling pressure intensified significantly in August, with FPIs disposing shares worth over ₹35,000 crore. Analysts primarily attribute this major exodus to the decline in the rupee's value, which has dampened foreign investor sentiment.

Domestic Investor Response

In stark contrast to foreign selling, domestic institutional investors (DIIs) demonstrated year-end optimism by purchasing equities worth ₹6,159.81 crore. The DIIs have maintained their net buying stance for approximately 50 sessions, providing crucial market support amid sustained FPI outflows.

Market Performance Overview

Despite the selling pressure, Indian equity indices showed resilience with marginal declines. The Nifty 50 dropped 3.25 points or 0.01% to close at 25,938.85, while the Sensex fell 20.46 points or 0.02% to end at 84,675.08.

Sectoral Highlights

The Nifty Metal index emerged as the session's standout performer, surging 2.00% to achieve a fresh all-time high of 11,029. PSU Banks and Auto sectors also attracted buying interest, providing cushion against FPI selling and year-end market lethargy. Conversely, IT, Realty, and Consumer Durables sectors faced profit-booking pressure.

The sustained FPI selling streak underscores ongoing foreign investor concerns about Indian market valuations and currency stability, while robust domestic institutional support continues to provide market stability during this challenging period.