Market carnage: FIIs turn net sellers in each session this month; trend reversal likely?

Foreign Institutional Investors (FPIs) are on a selling spree this year in the Indian equity market as Trump tariffs and US-Israel and Iran war wrecked investor sentiment. FIIs offloaded Rs 1.04 lakh crore worth in equities in 2026, with over half of the selling coming in March alone. FII have been net sellers in Indian equities in each session this month with the figure reaching Rs 56,883 crore in just nine trading sessions. 

The selling by FIIs comes amid negative sentiment on Dalal Street. 

The equity market is in a strong correction, with Sensex plunging 6723 pts in all nine sessions in March. On similar lines, Nifty cracked 2062 pts on weak global cues. 

Amid Trump tariffs, the West Asia war and concerns surrounding the impact of high crude price on India’s growth and corporate earnings, Sensex has plunged 12.65% or 10,772 pts this year. Nifty too lost 11.59% or 3030 pts during the same period. 

According to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, FIIs are likely to continue selling in the market in the near-term, particularly when there is a mild rally in the market. This will add to the weakness in the market, even in fundamentally sound sectors and stocks. 

"The poor returns from India vis a vis other markets - both developed and emerging- during the last eighteen months is the principal reason for FPI’s indifference towards India. If their sustained selling strategy is to change, there should be clear indications of earnings recovery in India. In the present uncertain context, this will take time. 

Now FPIs regard South Korea, Taiwan and China as better markets to invest since they are relatively cheaper than India even after the recent correction. Also, the corporate earnings prospects in these markets appear better than that of India," said Vijayakumar.