MUMBAI, Aug 31: Despite heavy selling in secondary markets, foreign institutional investors (FIIs) invested Rs 40,305 crore in Indian equities via the primary market in August, driven by fair IPO valuations, analysts said.
However, FIIs continued to pull out funds from the broader market, selling Rs 39,063 crore through exchanges in August alone.
This brings total FII outflows in 2025 so far to Rs 1.71 lakh crore, following Rs 1.21 lakh crore in 2024.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed the continued selling to relatively high valuations in India compared to other markets, prompting FIIs to shift funds to cheaper destinations.
He noted, however, that FIIs have remained consistent buyers in the primary market.
Tariff uncertainties and currency fluctuations are also influencing FII behaviour and contributing to market volatility.
Market sentiment remains cautious, with risk appetite subdued despite otherwise range-bound trading.
On a broader economic front, India’s macro outlook remains strong. The country is projected to become the world’s third-largest economy by 2030, reaching a GDP of $7.3 trillion.
Official data shows GDP growth accelerated to 7.8% in the April–June quarter of FY25, up from 6.5% in the same quarter of FY24. India is also on track to surpass Germany in GDP by 2028 and achieve a $5 trillion economy by 2027.
Looking ahead, the first week of September is expected to be event-heavy. Investors will watch key data releases including auto sales, HSBC Manufacturing, Services, and Composite PMIs.
Additionally, the upcoming GST Council meeting could shape policy direction, with industry groups pushing for faster reform implementation.
Given the macro-heavy week and ongoing volatility, analysts advise a cautious and balanced investment approach in the near term. (IANS)
