On Monday, heavy selling in top-valued Reliance Industries and HDFC Bank shaved off gains made by benchmark indices Sensex and Nifty in early morning trade. Once again, global negative sentiment, paired with a cautious approach to Indian equities, continued to bear on foreign investors who continued the outflow of funds from the market. Sensex fell below the 73,000 mark and Nifty dipped closer to the 22,000 level.
Apart from the big two, IndusInd Bank, Axis Bank, Bajaj Finserv, Tata Steel, Adani Ports, Tata Motors, Zomato, Bajaj Finance, and Hindustan Unilever shed heavily among the 30-share Sensex. This undercut any gains made by UltraTech Cement, Mahindra & Mahindra, Tech Mahindra, Larsen & Toubro, HCL Tech, Infosys, and Airtel.
Sensex shed at least 370 points to trade around 72,825 while NSE Nifty shed 112 points to 22,008 as of 11.20am IST.
Unlike most of last week, Asian markets Tokyo, Hong Kong, and Shanghai traded higher in the morning, following the US market trend, which was positive on better-than-expected US bond yields.
However, global geopolitics continued to scare foreign investors, especially after the recent showdown between US President Donald Trump and Ukraine President Volodymyr Zelenskyy. Trade war fears triggered by possible sanctions, tariffs, and global trade changes led to more pressure on emerging markets such as India.
A staggering ₹1.12 lakh crore left the country in the first two months of 2025, with foreign investors pulling out ₹34,574 crore from India’s equity markets in February alone.
Market watchers, for the past four months, had warned about the bloated valuations of India-listed equities. A dismal earnings season poured fuel over the fire, especially during a time of global turmoil triggered by the second coming of Trump.
Market data available showed that Foreign Portfolio Investors (FPIs) systematically and aggressively pulled out funds from the Indian market. The net outflow hit ₹78,027 crore in January and ₹34,574 crore in February—totalling ₹1,12,601 crore in 2025 so far.
Experts, such as Vipul Bhowar of Waterfield Advisors, are of the opinion that FPIs sold in India due to these high valuations and moved money to Chinese stocks. Others turned towards US assets on an appreciating US dollar, improving US bond yields, and global economic uncertainties.
This incessant selling has hurt the market, with the Sensex slumping more than 6 per cent since the year began. Back in 2023, Indian markets enjoyed ₹1.71 lakh crore in net inflows. In 2024, it shrunk to a mere ₹427 crore, in comparison.
This cautious approach by foreign investors has even led to the selling in high-performing stocks, too. According to V.K. Vijayakumar of Geojit Financial Services, “they are selling in the best-performing sector with attractive valuations”, such as BFSI.
