{"id":5037,"date":"2025-03-10T13:24:45","date_gmt":"2025-03-10T07:54:45","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=5037"},"modified":"2025-05-23T12:53:48","modified_gmt":"2025-05-23T07:23:48","slug":"us-based-foreign-portfolio-investors-suffer-20-decline-in-indian-equities","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/us-based-foreign-portfolio-investors-suffer-20-decline-in-indian-equities\/","title":{"rendered":"US-Based Foreign Portfolio Investors Suffer 20% Decline in Indian Equities Amid Market Sell-Off"},"content":{"rendered":"<h2 data-start=\"105\" data-end=\"193\">Market Volatility, FPI Outflows Lead to Steep Drop in US Fund Holdings in India<\/h2>\n<p data-start=\"195\" data-end=\"416\">Mumbai, India \u2013 US-based foreign portfolio investors (FPIs) have witnessed a significant erosion in the value of their Indian equity holdings, with portfolio values plunging 20% since September 2024.<\/p>\n<p data-start=\"418\" data-end=\"639\">According to data compiled by Moneycontrol from depositories, the total value of US-based FPIs\u2019 equity holdings in India fell from \u20b933.3 lakh crore in September 2024 to \u20b926.61 lakh crore as of February 28, 2025.<\/p>\n<p data-start=\"641\" data-end=\"905\">This decline coincides with a 13% drop in the benchmark Sensex, driven by heavy selling by offshore funds since October 2024. The outflows have been exacerbated by a weaker rupee and policy uncertainties in the US under Donald Trump\u2019s presidency.<\/p>\n<h2 data-start=\"912\" data-end=\"963\">Highlights of US FPI Sell-Off in India<\/h2>\n<ul data-start=\"965\" data-end=\"1773\">\n<li data-start=\"965\" data-end=\"1100\">US-based FPIs\u2019 holdings dropped from \u20b933.3 lakh crore in September 2024 to \u20b926.61 lakh crore in February 2025\u2014a decline of 20%.<\/li>\n<li data-start=\"1101\" data-end=\"1249\">Total FPI holdings in India fell by \u20b915.5 lakh crore since September, with US-based investors accounting for \u20b96.7 lakh crore of the decline.<\/li>\n<li data-start=\"1250\" data-end=\"1385\">US-based FPIs\u2019 holdings in dollar terms fell from $397 billion to $304 billion\u2014a sharper 24% decline\u2014due to rupee depreciation.<\/li>\n<li data-start=\"1386\" data-end=\"1487\">The Indian rupee has weakened by 4.5% since September, now hovering near \u20b987.3 per US dollar.<\/li>\n<li data-start=\"1488\" data-end=\"1616\">Since October 1, 2024, FPIs have net sold Indian shares worth \u20b92.3 lakh crore, significantly impacting market sentiment.<\/li>\n<li data-start=\"1617\" data-end=\"1773\">The overall value of foreign portfolio holdings in India dropped to $713 billion in February 2025 from $931 billion in September 2024\u2014a 24% decline.<\/li>\n<\/ul>\n<h2 data-start=\"1780\" data-end=\"1833\">Why Are US-Based Funds Pulling Out of India?<\/h2>\n<h3 data-start=\"1835\" data-end=\"1887\">Trump\u2019s Economic Policies Fuel Uncertainty<\/h3>\n<p data-start=\"1889\" data-end=\"2228\">The steep decline in US-based investments in India aligns with Donald Trump\u2019s return to the presidency in January 2025. His administration\u2019s policies, including tariff hikes and trade restrictions, have increased uncertainty in global financial markets, leading to portfolio rebalancing among institutional investors.<\/p>\n<blockquote data-start=\"2230\" data-end=\"2433\">\n<p data-start=\"2232\" data-end=\"2433\">\u201cThe uncertainty surrounding Trump\u2019s trade policies and potential tariffs on Indian exports has made US institutional investors cautious about emerging markets,\u201d said a leading market strategist.<\/p>\n<\/blockquote>\n<h3 data-start=\"2435\" data-end=\"2473\">Impact of Rupee Depreciation<\/h3>\n<p data-start=\"2475\" data-end=\"2605\">The depreciation of the Indian rupee against the US dollar has further amplified portfolio losses for foreign investors.<\/p>\n<ul data-start=\"2607\" data-end=\"2841\">\n<li data-start=\"2607\" data-end=\"2707\">The rupee has depreciated 4.5% since September 2024, now trading at \u20b987.3 per US dollar.<\/li>\n<li data-start=\"2708\" data-end=\"2841\">This has eroded the dollar value of Indian equity holdings, making it less attractive for foreign investors to stay invested.<\/li>\n<\/ul>\n<h3 data-start=\"2843\" data-end=\"2885\">US Fed Policy and Interest Rates<\/h3>\n<p data-start=\"2887\" data-end=\"3071\">With the US Federal Reserve keeping interest rates high, investors have redirected capital to US assets offering better returns, further fueling outflows from Indian markets.<\/p>\n<blockquote data-start=\"3073\" data-end=\"3226\">\n<p data-start=\"3075\" data-end=\"3226\">\u201cAs long as US bond yields remain high, capital will continue flowing back to the US, affecting Indian equity markets,\u201d said a financial analyst.<\/p>\n<\/blockquote>\n<h2 data-start=\"3233\" data-end=\"3294\">How US-Based FPIs Compare to Other Foreign Investors<\/h2>\n<p data-start=\"3296\" data-end=\"3520\">The United States remains the largest contributor to FPI inflows into India, accounting for nearly 50% of total foreign investments. However, the recent sell-off has impacted the overall FPI landscape in India.<\/p>\n<p data-start=\"3522\" data-end=\"3733\">As per NSDL and CDSL Asset Under Custody (AUC) disclosures, total foreign portfolio holdings in India dropped from \u20b978 lakh crore in September 2024 to \u20b962 lakh crore in February 2025\u2014a 22% decline.<\/p>\n<h3 data-start=\"3735\" data-end=\"3790\">Norwegian Funds Outperform US-Based Investors<\/h3>\n<p data-start=\"3792\" data-end=\"3900\">While US-based FPIs saw a steep 20% decline, Norwegian funds managed to limit their losses to 14%.<\/p>\n<ul data-start=\"3902\" data-end=\"4205\">\n<li data-start=\"3902\" data-end=\"4058\">Norway\u2019s sovereign wealth fund, Norges Bank, follows a long-term investment approach, avoiding short-term sell-offs during market downturns.<\/li>\n<li data-start=\"4059\" data-end=\"4205\">Norwegian FPI holdings declined from \u20b92.8 lakh crore in September to \u20b92.4 lakh crore in February, a far smaller drop compared to US funds.<\/li>\n<\/ul>\n<blockquote data-start=\"4207\" data-end=\"4397\">\n<p data-start=\"4209\" data-end=\"4397\">\u201cNorges Bank\u2019s strategy is focused on long-term value, unlike hedge funds and short-term institutional investors who react quickly to market fluctuations,\u201d said an investment expert.<\/p>\n<\/blockquote>\n<h2 data-start=\"4404\" data-end=\"4462\">What Lies Ahead for Foreign Investments in India?<\/h2>\n<h3 data-start=\"4464\" data-end=\"4522\">Factors That Could Influence FPI Inflows in 2025<\/h3>\n<ol data-start=\"4524\" data-end=\"5369\">\n<li data-start=\"4524\" data-end=\"4705\">\n<p data-start=\"4527\" data-end=\"4577\">US Federal Reserve\u2019s Interest Rate Decisions<\/p>\n<ul data-start=\"4581\" data-end=\"4705\">\n<li data-start=\"4581\" data-end=\"4705\">If the Fed signals interest rate cuts later in 2025, liquidity could flow back into emerging markets like India.<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"4707\" data-end=\"4997\">\n<p data-start=\"4710\" data-end=\"4758\">Indian Economic Growth &amp; Domestic Policies<\/p>\n<ul data-start=\"4762\" data-end=\"4997\">\n<li data-start=\"4762\" data-end=\"4899\">Despite market corrections, India remains one of the fastest-growing economies, making it attractive for long-term investors.<\/li>\n<li data-start=\"4903\" data-end=\"4997\">Clarity on government policies for foreign investors could help improve FPI sentiment.<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"4999\" data-end=\"5167\">\n<p data-start=\"5002\" data-end=\"5030\">Stability in the Rupee<\/p>\n<ul data-start=\"5034\" data-end=\"5167\">\n<li data-start=\"5034\" data-end=\"5167\">If the rupee stabilizes in the coming months, foreign investors may return to Indian equities as currency risks diminish.<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"5169\" data-end=\"5369\">\n<p data-start=\"5172\" data-end=\"5222\">Policy Clarity from the Trump Administration<\/p>\n<ul data-start=\"5226\" data-end=\"5369\">\n<li data-start=\"5226\" data-end=\"5369\">If Trump\u2019s policies on global trade become clearer, it could reduce market uncertainty and influence investor sentiment positively.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<blockquote data-start=\"5371\" data-end=\"5537\">\n<p data-start=\"5373\" data-end=\"5537\">\u201cOnce global macroeconomic factors settle, we expect FPIs\u2014especially US pension and university funds\u2014to return to Indian markets,\u201d said a senior fund manager.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Market Volatility, FPI Outflows Lead to Steep Drop in US Fund Holdings in India Mumbai, India \u2013 US-based foreign portfolio investors (FPIs) have witnessed a significant erosion in the value of their Indian equity holdings, with portfolio values plunging 20% since September 2024. According to data compiled by Moneycontrol from depositories, the total value of [&hellip;]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1362,615],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-5037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-and-economy-news","8":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/5037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=5037"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/5037\/revisions"}],"predecessor-version":[{"id":5046,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/5037\/revisions\/5046"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/5045"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=5037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=5037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=5037"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=5037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}