Synopsis: The Indian stock market witnessed its seventh straight day of losses, with the Nifty 50 dropping over 750 points (3%) in just a week as FIIs pulled out more than ?30,141 crore in September 2025, driven by US tariffs, visa fee hikes, and a weakening rupee.
Nifty Under Pressure Despite Domestic Buying
The Nifty 50 index declined from 25,423 to 24,654 in seven consecutive trading sessions last week, reflecting a fall of more than 750 points or around 3%. Despite consistent buying support from Domestic Institutional Investors (DIIs), escalating trade tensions and relentless foreign selling have kept market sentiment weak.
Record FII Outflows Continue
FIIs sold equities worth ?30,141.68 crore in the cash segment so far in September—marking the third straight month of net outflows.
- July 2025: ?47,666.68 crore outflows
- August 2025: ?46,902.92 crore outflows
- September 2025: ?30,141.68 crore outflows (till date)
With just two trading sessions left in the month, FIIs are expected to remain net sellers, further adding to volatility.
Key Triggers Behind the Market Selloff
A combination of global and domestic headwinds has fueled the exodus of foreign funds:
- US Trade Tariffs: 25% tariff on Indian goods and 100% tariff on branded pharmaceuticals have strained Indo-US trade relations.
- Visa Fee Hike: H-1B visa fee raised sharply to $100,000 per new applicant, impacting India’s IT sector outlook.
- Tariffs on Russian Crude Imports: Additional 25% duty has increased input costs for Indian refiners.
- High Valuations: Nifty’s P/E ratio at ~22, higher than historical averages, has made Indian equities expensive.
- Rupee Depreciation: The rupee hit record lows, reducing foreign investor returns.
- Weak Corporate Earnings: Export-driven sectors like IT, textiles, jewellery, and chemicals have been particularly vulnerable.
FIIs Shift Focus to Other Asian Markets
Comparatively cheaper valuations in China and South Korea, coupled with better earnings visibility, are attracting FIIs away from India. The persistent rupee slide has only reinforced this redirection of capital.
Outlook
Market experts caution that unless there is progress in trade talks, stability in the rupee, and improvement in corporate earnings, FIIs may continue to remain cautious. In the meantime, domestic institutional investors are expected to play a stabilizing role, absorbing some of the selling pressure.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Investors are advised to consult with certified financial experts before making market-related decisions.
