Mumbai, Aug 31 Despite heavy selling through the exchanges, foreign institutional investors (FIIs) bought equity for Rs 40,305 crore this month through the primary market where the valuations of the IPOs are fair, analysts said on Sunday.
Sudden changes in tariff policies and exchange rates are also weighing on FII behaviour.
These factors are likely to remain volatile in the near-term, said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
FIIs continued their selling spree in August taking the total selling through exchanges to Rs 39,063 crore.
With this August selling, total FIIs selling in 2025, so far, has reached Rs 170,940 crore.
This has come on the back of the total selling of Rs 121,210 crore by FIIs in 2024.
According to Vijayakumar, the simple explanation for this massive selling by the FIIs is the relatively high valuations in India compared to valuations in other markets. FIIs are moving money to cheaper markets.
“It is important to note that FIIs have been sustained buyers in the primary market for long,” he mentioned.
Tariff-related uncertainty dominates market sentiment, curbing risk appetite and overshadowing otherwise range-bound trading.
However, from being the world’s fourth-largest economy, India is on track to become the third-largest by 2030 with a $7.3 trillion GDP.
India is projected to reach a GDP of Rs 4,26,45,000 crore ($5 trillion) by 2027 and is on course to surpass Germany by 2028.
This comes as India’s GDP growth accelerated to a robust 7.8 per cent in the first quarter (April-June) of the current financial year compared to the growth of 6.5 per cent during the same quarter of FY 2024-25, as per official figures released by the Ministry of Statistics.
According to market watchers, this will be a good news for investors going forward.
The upcoming week will be event-heavy, marking the start of a new month with several high-frequency indicators due for release.
Investors will closely track auto sales data, along with HSBC Manufacturing, Services, and Composite PMIs. Additionally, the GST Council meeting will be a key focus, with expectations building around an accelerated implementation of proposed reforms following demands from industry bodies, said Ajit Mishra–SVP, Research, Religare Broking Ltd.
These events are likely to set the near-term tone for risk sentiment. A cautious and balanced approach is advisable heading into the macro-heavy week.
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