FPIs withdraw close to ₹18,000 crore from Indian equities in August so far amid tariff tensions

The foreign investors have pulled out nearly ₹18,000 crore from Indian equities so far this month, weighed down by escalating US-India trade tensions, disappointing first-quarter corporate earnings, and a weakening Indian rupee.

With this, the total outflow by Foreign Portfolio Investors (FPIs) in equities has reached ₹1.13 lakh crore so far in 2025, according to data from the depositories.

Going forward, FPI sentiment is expected to remain "fragile and in risk-off mode", with tariffs and trade negotiations emerging as key factors to watch out for in the coming week, according to Vaqarjaved Khan, CFA, Senior Fundamental Analyst at Angel One.

The data showed that FPIs withdrew a net sum of ₹17,924 crore from equities in this month (till August 8). Foreign investors had pulled out ₹17,741 crore on a net basis in July. Before that, FPIs invested ₹38,673 crore in the preceding three months from March to June.

Meanwhile, on Friday, both the foreign institutional investors (FIIs) and the domestic institutional investors (DIIs) have bought equities worth ₹1,932.81 crore and ₹7,723.66 crore on a net basis, exchange data showed.

The latest outflows were primarily due to escalating US-India trade tensions, disappointing first-quarter corporate earnings and a weakening Indian rupee, Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, said.

From August 1, the US imposed a 25% tariff on Indian goods and increased these tariffs by an additional 25% during the current week. This spooked the markets and FPIs, leading to a massive sell-off in Indian equities, Angel One's Khan said.

Along with tariffs, rising US Treasury yields also led to foreign money moving towards treasuries, he added.

On the other hand, FPIs invested ₹3,432 crore in the debt general limit and put in ₹58 crore in the debt voluntary retention route during the period under review.

On Friday, the S&P BSE SENSEX finally settled at 79,857.79, declining 765.47 points, or 0.95%, while the 50-share index NIFTY50 closed at the 24,363.30 level, falling 232.85 points, or 0.95%.

The equity benchmark indices have slipped for the sixth straight week—their longest losing streak in five years, with Sensex and NIFTY50 each falling nearly 1%. The Nifty Midcap gauge has declined over 1% during the week.

NSE-listed firms' market capitalisation lost ₹4.7 lakh crore and stood at ₹437.67 lakh crore at the end of the session on Friday. Similarly, the market capitalisation of BSE-listed firms also lost ₹5.74 lakh crore.