FPIs withdraw ₹35,000 crore in August, the biggest sell-off in six months

The overseas investors pulled out ₹34,993 crore (around $4 billion) from the equity market, making it the sharpest sell-off in six months, weighed down by US tariffs on Indian exports and pricey domestic valuations.

The withdrawal was nearly double the ₹17,741 crore outflow recorded in July.

With this, the total outflow by foreign portfolio investors (FPIs) in equities reached the ₹1.3 lakh crore mark so far in 2025, data with the depositories showed.

Market experts believe that withdrawals were triggered by a combination of global and domestic factors.

The latest withdrawal was the sharpest since February, when FPIs dumped Indian equities worth ₹34,574 crore.

"The announcement of steep US tariffs of up to 50% on Indian exports dented sentiment significantly, raising concerns over India's trade competitiveness and growth outlook," Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, said.

"At the same time, corporate earnings for the June quarter for a few key sectors fell short of expectations, further dampening investor appetite," Srivastava added.

On the other hand, FPIs invested ₹6,766 crore in the debt general limit and withdrew ₹872 crore in the debt voluntary retention route during the period under review.

Market investors became poorer by ₹11.21 lakh crore in three days (August 26, 28, and 29) of selling pressure, where the benchmark SENSEX tumbled 1,826 points.

In the past three trading days, the BSE benchmark has plummeted 1,826.26 points, or 2.23%.

On Friday, the 30-share BSE SENSEX dropped 270.92 points, or 0.34%, to settle at 79,809.65. During the day, it declined 338.81 points, or 0.42%, to 79,741.76.

The market capitalisation of BSE-listed firms eroded by ₹11,21,459.36 crore to ₹4,43,65,504.09 crore ($5.05 trillion) in three days.

"The SENSEX ended Friday's trade on a subdued note, slipping 270.92 points to close at 79,809.65 as persistent concerns over US tariffs on Indian exports weighed on investor sentiment and kept foreign inflows under pressure," Vikram Kasat, Head - Advisory at PL Capital, said.

From the SENSEX firms, Mahindra & Mahindra fell by 2.96%, followed by Reliance Industries, which lost 2.21%. Infosys, NTPC, Tata Motors and Tech Mahindra were also among the laggards.

However, ITC, Bharat Electronics, Trent, and Larsen & Toubro were among the major gainers.