FPIs Pull Rs.30,000 Cr from Indian Markets in First Week of June amid Bond Yield Pressures
By HDFC SKY | Updated at: Jun 9, 2025 12:24 AM IST
Mumbai, June 8, 2025 — Foreign portfolio investors (FPIs) began June on a cautious note, pulling out a substantial ₹30,192 crore from Indian capital markets during the first five trading sessions, largely driven by persistent selling in debt instruments and moderate activity in equities.
This trend marks a shift from the net positive stance seen in May, as higher global bond yields and foreign exchange volatility led investors to trim exposure to emerging markets. Data from NSDL shows pronounced selling under the Debt-General, FAR, and VRR routes, with minor inflows in equities providing only limited relief.
FPI Weekly Investment Trend (June 2–6)
| Date | Gross Buys (₹ Cr) | Gross Sales (₹ Cr) | Net Investment (₹ Cr) | Net (USD Mn) |
|---|---|---|---|---|
| 02-Jun-2025 | 54,523.75 | 72,765.62 | (18,241.87) | (2,134.12) |
| 03-Jun-2025 | 16,455.83 | 19,189.76 | (2,733.93) | (320.01) |
| 04-Jun-2025 | 19,293.48 | 26,318.75 | (7,025.27) | (822.06) |
| 05-Jun-2025 | 20,399.18 | 22,408.97 | (2,009.79) | (233.82) |
| 06-Jun-2025 | 20,577.43 | 20,758.82 | (181.39) | (21.14) |
Total Outflow (Week): ₹30,192.25 crore
Heavy Debt Selling Drags Flows
The bulk of the withdrawals originated from the debt segment:
- Debt-FAR (Fully Accessible Route): Cumulative outflow of over ₹12,476 crore during the week.
- Debt-VRR (Voluntary Retention Route): Net selling of ₹10,328 crore.
- Debt-General Limit: Witnessed withdrawals exceeding ₹6,300 crore in the first four sessions alone.
This steep debt outflow highlights FPIs’ rising concerns over narrowing yield differentials, especially as US treasury yields climb, diminishing the appeal of Indian bonds.
Equities See Stabilisation After Steep Outflows
While equity markets bore the brunt of FPI selling early in the week, the tone moderated by June 5:
- June 2: Equity outflow of ₹5,003.74 crore.
- June 5: Positive inflow of ₹1,605.42 crore.
- June 6: Marginal net addition of ₹49.41 crore, indicating a cautious return of investor interest.
Primary market activity also supported inflows, particularly in mutual fund equity schemes, which collectively saw net additions throughout the week.
Derivatives Trading Reflects Cautious Hedging
FPIs remained active in derivatives, though their stance skewed defensive:
| Derivative Type | Buy (₹ Cr) | Sell (₹ Cr) | Open Interest (₹ Cr) |
|---|---|---|---|
| Index Options | 35,16,343 | 35,00,019 | 3,11,721.44 |
| Stock Futures | 17,840.97 | 18,234.02 | 3,78,417.66 |
| Stock Options | 46,601.72 | 49,479.92 | 62,075.79 |
While volumes remained robust, particularly in index and stock options, net positioning continued to favor risk mitigation amid global uncertainty.
Outlook: Debt Sensitivity Persists
The scale of outflows in the debt segment underscores global investors’ sensitivity to US monetary policy signals and bond yield movements. Unless the yield spread between Indian and US treasuries expands, FPIs may remain hesitant on debt allocations.
On the equity front, while broader market resilience and economic fundamentals support long-term interest, short-term caution is likely to persist due to geopolitical factors and valuation concerns.
About NSDL FPI Monitor
The NSDL platform aggregates daily FPI investment data across equities, debt (FAR, VRR, General), hybrid instruments, mutual funds, and derivatives based on reports from NSE, BSE, MSEI, MCX, and NCDEX.
REF: https://www.fpi.nsdl.co.in/web/Reports/Monthly.aspx
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