FPIs Continue to Withdraw from Indian Markets for Week Ending June 19 Amid Global Caution
By HDFC SKY | Published at: Jun 20, 2025 11:27 AM IST
Mumbai, June 20: Foreign Portfolio Investors (FPIs) showed continued caution in Indian capital markets, pulling out a net ₹4,092 crore during the trading week from June 14 to June 19, 2025. This indicates a sustained, hesitant approach amid global economic uncertainties. While equity investments had mixed results, debt investments remained unstable across various categories.
Net FPI Investment Trend: June 14–19, 2025
| Date | Net Equity (₹ crore) | Net Debt (₹ crore) | Net Hybrid & Others (₹ crore) | Total Net Investment (₹ crore) |
|---|---|---|---|---|
| June 14 (Fri) | (3,275.76) | (9.91) | 22.31 | (3,207.31) |
| June 16 (Mon) | (373.65) | (70.82) | 47.14 | (393.34) |
| June 17 (Tue) | (2,647.46) | 113.64 | 24.57 | (2,502.67) |
| June 18 (Wed) | 2,788.27 | (1,172.85) | (6.43) | 1,668.25 |
| June 19 (Thu) | (597.59) | (1,051.63) | (4.68) | (1,627.72) |
| Total | (2,105.19) | (2,191.57) | 82.91 | (4,092.57) |
Note: Equity data includes both stock exchange and primary market flows. Debt includes General, VRR, and FAR limits.
Segment-Wise Observations
Equities
FPIs were net sellers in four out of five trading sessions. June 18 was the only day with a significant inflow of ₹2,788 crore, likely due to investors buying after price dips or due to index rebalancing. The total equity outflow for the week was ₹2,105 crore, a change from the inflows seen the previous week.
Debt Markets
There were net outflows of ₹2,191 crore across General, VRR, and FAR routes. The FAR segment experienced the largest withdrawal, with ₹1,070.77 crore pulled out on June 19 alone. Investors are closely watching the U.S. Federal Reserve’s interest rate plans and the stability of the Indian Rupee before making major bets in debt.
Hybrid & Mutual Fund Flows
Hybrid instruments experienced small net inflows of ₹82.91 crore, primarily from mutual fund schemes and select hybrid products. Mutual funds also made selective equity purchases, particularly on June 18, with ₹62.98 crore in net inflows.
FPI Derivative Activity (June 19, 2025)
| Instrument | Contracts Bought | Amount (₹ crore) | Contracts Sold | Amount (₹ crore) |
|---|---|---|---|---|
| Index Futures | 17,848 | 3,205.19 | 17,514 | 3,164.21 |
| Index Options | 78,25,810 | 14,46,657.63 | 79,13,327 | 14,62,491.81 |
| Stock Futures | 2,49,904 | 16,419.39 | 2,77,333 | 18,199.80 |
| Stock Options | 11,72,769 | 78,477.20 | 11,83,887 | 79,039.50 |
- Index option activity remained heavy, with marginal net selling.
- Futures positions indicate that traders are cautious, with a marginally bearish tilt on stocks.
Strategic Takeaways
Despite intermittent inflows, foreign portfolio investors (FPIs) continue to exhibit risk aversion towards Indian assets. Key concerns revolve around:
- Fed’s Stance and US Treasury Yields: The U.S. Federal Reserve’s latest meeting on June 18, 2025, kept interest rates steady (4.25%-4.5% range). While the Fed’s projections still suggest two rate cuts in 2025, Chairman Jerome Powell emphasised the importance of monitoring inflation, particularly in light of proposed tariffs. This cautious stance often leads to a stronger U.S. dollar and higher U.S. Treasury yields, making emerging markets less attractive.
- Global Geopolitical Tensions: Even with some de-escalation in the Middle East this week, global geopolitical tensions remain a background concern that can prompt investors to seek safer assets over emerging market equities.
- Indian Valuations: Indian market valuations are considered high, which may discourage large new FPI investments and encourage profit-taking.
Market observers expect this dynamic, balancing valuations against macroeconomic challenges, to continue. Investors will likely look for more clarity from the Reserve Bank of India’s (RBI) next policy review or major economic data releases. The RBI surprisingly cut the repo rate by 50 basis points to 5.50% at its June 6, 2025, meeting and shifted to a ‘neutral’ stance, citing easing inflation. The next RBI MPC meeting is scheduled for August 5-7, 2025.
About FPI Monitoring
Foreign Portfolio Investors participate in Indian markets under SEBI regulations. Investment routes include General, VRR (Voluntary Retention Route), and FAR (Fully Accessible Route), each offering varying access and restrictions. Daily data is compiled by NSDL from exchanges and custodians.
For full data, refer to NSDL’s monthly report portal.
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