Share Market Tips: FII has sold Rs 1 lakh crore since July, then foreign investors may turn to the market

Share Market Update: Since July, foreign institutional investors (FIIs) have sold more than Rs 1 lakh crore worth of Indian stocks. This has affected the market sentiment. 

But the continuous buying by domestic investors has supported the market. According to provisional data from the stock exchange, this selling was driven by weak earnings, high valuations and uncertainty over US tariffs. From July 1 to September 8, FIIs sold shares worth a total of Rs 1.02 lakh crore.

Total sale of Rs 2.18 lakh crore in the year 2025

In the first six sessions of September, shares worth Rs 7,800 crore were sold. According to NSDL data, shares worth Rs 11,169 crore were sold in the month of September till September 13. 

So far in the year 2025, FII has sold shares worth Rs 2.18 lakh crore. On the other hand, domestic institutional investors (DII) have countered it. 

In the year 2025, DII bought shares worth Rs 5.37 lakh crore. Since August 2023, DII has been a continuous buyer in the cash market. Which has given stability to the market.

Small and mid-cap valuations remained high in August

Corporate earnings growth in single digits was the main reason for FII selling. Experts said that in August, small and mid-cap valuations remained high, while large-caps adjusted towards the long-term average. 

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that valuations in the country are higher than markets like China, Hong Kong and South Korea. 

Due to this, FIIs sold in India and bought in cheaper markets. This policy worked this year, as those markets are performing better than India.

Will FIIs reduce selling or become buyers?

Vijaykumar said that in the coming time, FIIs will reduce selling or become buyers. There are signs of reversal in the Indian market, such as repo rate cut and GST reform can strengthen it. 

The country's GDP grew strongly in Q1. Budget tax cut, MPC rate cut and GST rationalization can maintain growth. Earnings growth will be 8-10 percent in FY26, but may be above 15 percent in FY27, which will change FPI sentiment.