FIIs Exit ₹60,000 Crore from Indian Stocks in Two-Month Rout, Financials and IT Hit Hard

Foreign Institutional Investors (FIIs) have offloaded more than ₹60,000 crore from Indian equities over the past two months, raising concerns about the near-term outlook for financial and IT stocks. The aggressive selloff comes amid doubts over earnings recovery, coupled with global economic headwinds weighing on investor sentiment.

Sector-Wise Selloff

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According to data from the National Securities Depository Limited (NSDL), FIIs sold financial stocks worth ₹5,900 crore in July, followed by a steep ₹23,288 crore withdrawal in August. IT companies also bore the brunt, with ₹19,901 crore outflows in July and a further ₹11,285 crore in August, making the sector one of the hardest hit in recent months.

The exodus has not been limited to financials and IT alone. Oil and gas, power, and consumer goods stocks have also witnessed consistent foreign selling, intensifying market volatility.

Global and Domestic Factors

Analysts attribute the selloff to multiple factors, including slowing global growth, elevated interest rates in developed economies, and concerns around the earnings trajectory of key Indian sectors. Rising bond yields in the U.S. and continued geopolitical uncertainties have also prompted global investors to reallocate capital to safer assets.

Domestically, some sectors have faced pressure due to delayed earnings recovery, particularly in IT, where global demand softness and cautious client spending have affected revenue visibility. Similarly, financials have faced scrutiny on asset quality and margin pressures.

Expert Views and Long-Term Outlook

Despite the sharp outflows, some experts remain optimistic about India’s long-term growth story. They argue that the country’s structural drivers—such as a strong domestic economy, government-led infrastructure push, and rising retail investor participation—remain intact.

Market strategists suggest that while FII selling may continue in the short term, the correction could open up attractive entry points for long-term investors. Domestic institutional investors (DIIs), including mutual funds and insurance companies, have also stepped in as key buyers, partially offsetting the foreign exodus.

Conclusion

The ₹60,000 crore selloff by FIIs highlights the vulnerability of Indian equities to global shocks and sector-specific challenges. However, with India’s fundamentals still seen as strong, experts believe the long-term growth narrative remains resilient despite near-term volatility.