Continuous selling by foreign portfolio investors (FPIs) till the third week of January 2026 has increased the concern of investors. The biggest question before the investors who are expecting a rise in the market is whether this selling will continue further and will it put further pressure on the stock market? According to the data of depository NSDL, till now in January 2026, FPIs have withdrawn about Rs 22,500 crore from the Indian stock market. This trend has been going on since last year. In the year 2025, foreign investors had withdrawn a record Rs 1.66 lakh crore, due to which the market movements were limited to a great extent.
America-India trade deal became a big reason
According to experts, the biggest reason for FPI selling is the delay in the trade deal between India and America. America has already imposed 25% tariff on India and after this an additional 25% tariff was also imposed on India for purchasing oil from Russia. These decisions have weakened the confidence of global investors and they are withdrawing money from emerging markets.
Domestic investors took charge
However, amid selling by foreign investors, domestic institutional investors (DIIs) have supported the market. So far in January, DIIs have bought shares worth about Rs 34,000 crore. For this reason, there has not been a major decline in the market, but fluctuations remain.
Concerns about weak returns and expensive valuations
According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, India’s performance has been weak compared to other big markets. The year-to-date returns of Nifty 50 still remain negative. He said weak corporate earnings and high valuations are making foreign investors cautious.
What will be the direction of the market going forward?
Experts believe that the direction of the market in the coming days will depend on quarterly results and macro data. The results of big companies like Reliance Industries, HDFC Bank and ICICI Bank can decide the movement of the market. Apart from this, GDP, inflation and job data coming from America will also impact the strategy of investors.
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