There is still unrelenting FII selling. On February 24, 2025, FIIs sold Rs 6,287 crore in a single session. Since November, this discharge has been the biggest in a single day. On November 28, 2024, FIIs received Rs 11,756 crore in sales. As of October 2024, the FIIs have sold over Rs 3 lakh crore and Rs 1.30 lakh crore in 2025 alone.
According to Financial Express, India is currently the second-least allocated country in the APAC region. According to the most recent Bank of America fund manager survey (FMS), the proportion of investments in Indian stocks has dropped to a two-year low, while China has experienced a notable recovery.
FIIs have been dumping Indian equities like there’s no tomorrow and transferring their allocation to other lucrative Asian markets, such as China, according to one of the main storylines that has been circulating.
In 2025, the Chinese markets were really among the top-performing in the world. The Sensex and the Nifty are down more than 4% for the year, whereas some of its Asian counterparts, such as Hang Seng, have already increased by more than 15% in 2025. Because FIIs use the Hang Seng Index to invest in Chinese stocks, the gains on the index are very significant. Since its January lows, the Hang Seng Index has recovered remarkably, rising 24% and currently reaching three-year highs.
The market capitalization of Hang Seng was $4.56 trillion at the end of January 2025, up 26% from $3.62 trillion during the same time prior year. January 2025 saw an average daily turnover of $18.51 billion, up 49% from the same time the previous year, when it was $12.45 billion.
A contributing factor to the increase has been the spike in tech stocks driven by confidence in AI following China’s Deepseek developments. Last week saw a 5% increase in the Hang Seng Tech Index. Additionally, China’s GDP grew by 5.4% in Q4, which was better than expected. This bolstered investment sentiment in favor of the Chinese markets, especially when combined with expectations of a stimulus/liquidity injection from the Chinese central bank, PBOC.
India’s relative value in the emerging market (EM) basket is the other significant aspect. Comparatively speaking, India remains a more costly market. The dollar’s strength and muted results, in addition to this, are encouraging the outflows.
It’s interesting to note that some major brokerages have determined their annual Nifty target. Global stockbroker Citi has a target Nifty of 26,000 by December and is overweight on India. Nomura predicts that the markets will rise by 5% and that the Nifty will reach 23,784 by December. According to the majority of analysts, the Dollar Index’s decline to 104 levels may be a hint for FIIs, and money allocation is anticipated in the second half of 2025.
