Foreign Portfolio Investors (FPIs) ended the week of June 9-13, 2025, as net buyers with inflows of $391 million, despite increased volatility triggered by escalating geopolitical tensions. However, FPIs remain net sellers for June with cumulative outflows of around $634 million.

The week saw dramatic swings in FPI activity. After starting positively on June 9 with net inflows of $223.78 million, the momentum continued on June 10 ($136.96 million) and June 11 ($289.24 million), before turning sharply negative with outflows of $493.25 million on June 12 and $374.95 million on June 13.

Early week optimism short-lived

“The week began on a positive note, with FIIs turning net buyers buoyed by the Reserve Bank of India’s recent rate cut and liquidity-boosting measures,” said Himanshu Srivastava, Associate Director - Manager Research at Morningstar Investment Research India.

Improved global sentiment from easing US-China tensions and a softer US dollar initially supported risk-on appetite among foreign investors.

Late-week selling pressure

“However, the momentum was short-lived, as FIIs resumed selling as they approached end of the week,” Srivastava noted. The return of cautiousness was triggered by rising US bond yields, persistent global macro uncertainty, and deteriorating geopolitical conditions.

“The return of cautiousness was triggered by rising US bond yields, persistent global macro uncertainty, and a relatively muted earnings outlook in India versus other emerging markets,” he added.

Escalating tensions between Israel and Iran, along with renewed tariff threats, further dampened investor sentiment in the latter half of the week.

Sector-wise impact

The FPI selling pressure particularly affected rate-sensitive sectors. Export-oriented sectors such as IT and pharma managed to gain amid a weaker rupee, while banking, auto, and realty sectors witnessed profit booking.

June outlook remains cautious

“Despite the late-week pullback, FIIs ended the week as net buyers to the tune of $391 million. That said, they remain net sellers in June so far, with cumulative outflows of around $634 million,” Srivastava said.

FPI flows are expected to remain volatile amid ongoing geopolitical uncertainty and crucial central bank meetings ahead.

Published on June 14, 2025