FIIs extend selling streak in early sessions of 2026; analysts expect turnaround later

Foreign organization investors (FIIs) person begun 2026 connected a cautious note, continuing their selling streak successful Indian equities aft a bruising 2025. In the archetypal 2 trading sessions of the caller year, FIIs sold shares worthy Rs 7,608 crore, extending a inclination that saw dense outflows done December, arsenic per ET.FIIs were nett sellers passim December, offloading Indian equities worthy Rs 22,611 crore during the month. This took the full overseas outflow for 2025 to Rs 1,66,286 crore. According to marketplace participants, the standard of income past twelvemonth was unprecedented. V K Vijayakumar, main concern strategist astatine Geojit Investments, described 2025 arsenic the worst signifier of FII selling since overseas investors began investing successful Indian markets, reported ET.He noted that during the calendar twelvemonth 2025, FIIs sold equities worthy Rs 2.40 lakh crore successful the secondary market. However, investments of Rs 73,909 crore done the superior marketplace helped soften the wide impact. Even so, December unsocial saw secondary marketplace selling of Rs 30,332 crore, underlining the persistent unit connected equities.Explaining the reasons down the sustained exit, Vijayakumar pointed to comparatively precocious valuations successful India and the planetary displacement towards artificial intelligence-linked trades arsenic cardinal drivers.

He besides said the relentless selling contributed to weakness successful the rupee. The Indian currency emerged arsenic the worst-performing large currency successful 2025, depreciating astir 5% against the US dollar implicit the year, arsenic per ET.A person look astatine quarterly flows shows however uneven FII behaviour was during the year. Foreign investors pulled retired Rs 1,16,574 crore successful the January–March quarter, mounting a sharply antagonistic tone. This was followed by a little reversal successful April–June, erstwhile inflows stood astatine Rs 38,673 crore. Despite the anemic commencement to 2026, marketplace experts judge the outlook could amended implicit the year. Vijayakumar expects a displacement successful FII strategy arsenic India’s fundamentals strengthen. “Significant betterment successful India’s fundamentals are apt to pull nett FII inflows successful 2026. Robust GDP maturation and prospects of betterment successful firm net successful 2026 augur good for affirmative FII flows successful 2026,” helium said, arsenic quoted by ET.Nilesh Jain, caput vice president – equity probe astatine Centrum Broking, besides struck an optimistic note. He expects 2026 to beryllium amended than the erstwhile twelvemonth and has pegged the Nifty’s December 2026 people astatine 29,731, implying a imaginable upside of 13%. He attributed this presumption to improving macro indicators, stronger GDP growth, easing ostentation and an extremity to firm net downgrades.Jain added that India underperformed planetary emerging markets successful 2025, delivering its weakest comparative show successful 3 decades. Rupee depreciation, persistent FII selling and precocious US tariffs of 50% weighed connected sentiment, with nary commercialized woody reached by year-end.