FPIs net sold equities worth Rs 1.7 trillion in 2025 -- the highest annual net sale on record.
Stocks of fast-moving consumer goods companies have taken it on the chin in calendar year 2026 (CY26) with the Nifty FMCG index falling over 6 per cent compared to the Nifty 50 dipping 0.8 per cent. Nifty FMCG is one of the worst-performing sectors on the NSE in CY26.
Investing in gold trumped most other asset classes in terms of compounded annualised returns over the long term, suggests a report by FundsIndia.
Over 50 per cent, or 660 stocks, from the BSE 1000 index recorded negative returns during CY25.
Unless the primary market momentum slows, smallcap stocks will stay subdued.
The Reserve Bank of India (RBI) on Friday delivered a 25 basis point (bps) repo rate cut analysts expected, driven by the strong 8.2 per cent GDP growth in the September quarter. However, analysts do not expect a runaway market rally as the impact of US tariffs continues.
The BSE Smallcap index hit an over eight-month low of 47,627.96, falling 3 per cent in Tuesday's intraday trade amid selling pressure due to ongoing tariff-related concerns and rising geopolitical tensions.
'The net inflows into MF schemes may also have been lower last month, with investors booking profit and taking a more measured approach amid elevated valuations.'
The strong domestic flow offset selling by foreign portfolio investors who pulled out $23.3 billion (Rs 2.03 trillion) from domestic equity markets in CY25.
So far this year, the rupee has fallen by 4.2 per cent, the worst among its Asian peers.
Shares of Reliance Industries Limited (RIL) tumbled on Tuesday, posting its biggest single-day decline in 19 months, amid controversy over its purchase of Russian oil and profit-booking after recent gains.
The surge has come alongside a decline in average issue sizes and more muted listing-day returns compared with last year.
Foreign portfolio investors sold stocks worth Rs 1.42 trillion in 2025, with their sales hitting Rs 12,257 crore in the first four trading days of September.
'I expect IT stocks to trade lower for some time. They are unlikely to make money for investors.'
Global funds' assets under custody (AUC) in India have been flat this year, with a Rs 2 trillion drop in information technology (IT) holdings offset by gains in financial stocks. AUC is the total market value of equities held by FPIs.
Concerns over weakening demand for Indian pharmaceutical (pharma) drugs in the US - their largest export market - have weighed heavily on investor sentiment this year. While the Nifty 50 has gained 6.02 per cent year - to - date (as on September 15), the Nifty Pharma index has declined 5.18 per cent, National Stock Exchange data shows.
Retail investors are moving away from a buy-and-hold approach and towards more informed short-term positioning, recent investment patterns show.
The sector's IPO pipeline is led by Tata Capital's Rs 17,000 crore issue, followed by ICICI Prudential Asset Management at Rs 10,200 crore and Billionbrains Garage Ventures at Rs 6,000 crore.
As the rally in precious metals takes centre stage in 2025, most analysts recommend a larger allocation to gold over silver despite the latter's outperformance this year. In the current calendar year (CY25), spot gold prices in dollar terms rallied
More than a third of 83 mainboard IPOs this year ended their debut sessions in the red, with losses of up to 35 per cent.
Life Insurance Corporation (LIC) , the country's largest domestic institutional investor (DII), has seen a Rs 46,000 crore erosion in the value of its equity holdings amid market downturns in July. The benchmark indices, Nifty 50 and BSE Sensex, have slipped 2.6 per cent from their June 2025-end level to 24,837 and 81,463.09 respectively.
The surge in the market price is also attributed to demand by retail and high-networth individual investors ahead of the IPO.
Analysts expect Nifty to rise up by to 6 per cent in six months, with intermittent corrections likely due to global factors.
Brent crude oil prices can touch $150 a barrel (bbl) - up a whopping 103 per cent from the current levels - in the worst-case scenario if the Israel-Iran geopolitical tensions escalate, suggest analysts.
'If the US stagnates and falls into a recession, the dollar will weaken, oil prices will also dip. This augurs well for India.'
On average, stocks that debuted last year are down 37 per cent from their peak levels.
Since October, FPIs have offloaded Indian equities worth Rs 2.1 trillion.
The sharp pullback in mid and smallcap stocks signals a cooling-off period in segments that previously attracted considerable investor interest.
'As the markets are expected to remain jittery in the near term, we advise investors to use this opportunity to enter quality largecaps from a long-term perspective.'
Small and midcaps are leading the charge in the latest market rebound. Since November 21, when the benchmark S&P BSE Sensex and the National Stock Exchange Nifty hit their recent lows and slipped into correction territory, the Nifty Smallcap 100 index has risen by 8 per cent, while the Nifty Midcap 100 has gained 5.7 per cent. Meanwhile, the Nifty 50 index has risen by 4.7 per cent during this period.
Buying stocks during a dip, says Amar Nandu, research analyst, Samco Securities, can lead to higher compounding returns when the uptrend begins.
The recent selloff in the Indian equity market has been far more painful for mid and smallcap stocks compared to largecap stocks. The benchmark BSE Sensex is now down 9.5 per cent from its record monthly closing of 84,300 at the end of September last year. In the same period, the BSE MidCap has lost 17 per cent of its value, while the BSE SmallCap has corrected by 17.1 per cent.
The last time these two indexes recorded a negative performance on a calendar year basis was in CY19.
Retail investors have been the hardest hit in the recent market downturn, with stocks where they hold over 20% falling 45% from their 52-week highs.
Analysts are warning of growing risks to the market's sustained momentum, and even to the possibility of consolidation at current levels. Domestically, markets are grappling with several challenges, including a slowing economy, as indicated by the latest GDP data for the July-September (Q2) quarter of 2024-25 (FY25), sticky inflation, fluctuations in the rupee, waning consumption, and high interest rates.
Rupee depreciation, if it continues, will likely pull the markets down further. Since September 2024, the rupee has declined by 3.1 per cent, the Nifty has dropped by 8.5 per cent during the same period, and the Sensex has fallen by 7.3 per cent. If the decline continues, markets will need to brace for more pain as it could push foreign portfolio investors (FPIs) to exit their positions faster than anticipated.
'Though one cannot paint the entire microcap basket with the same brush, investors need to be careful now as to what they're buying.'
'Invest only in stocks of those companies that deliver on earnings and there is earnings visibility too for the next few quarters.'
As regards mid-caps and small-caps, analysts suggest investors buy only those stocks of those companies where there is earnings visibility for at least a few quarters and where the valuations have become reasonable.
'Over the next 12 months, it will be difficult to make 15 to 20 per cent return in the markets as the valuations appear stretched.'
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances