Weekly Musings – FPI flows for week ended July 18, 2025

FPIS TURN CAUTIOUS AHEAD OF TARIFF DEADLINE

After infusing $1.52 Billion, $497 Million, and $614 Million in last 3 weeks; the latest week to July 18, 2025 saw FPIs net sellers in equity to the tune of $(1,090) Million. FPIs were wary of the uncertainty over the trade deal as well as the new risk of secondary sanctions on countries like India importing crude oil from Russia. Jane Street has impacted F&O volumes.

During the week, the dollar index showed strength, rallying further to 98.46 levels. This led to the USDINR weakening to ₹86.15/$ mark and stayed above ₹86/$ for most of the week. Brent Crude could not sustain above the $70/bbl mark and eventually closed the week at $69.23/bbl. Demand still remains an overhang for oil.

MACRO FPI FLOW PICTURE UP TO JULY 18, 2025

The table captures monthly FPI flows into equity and debt for last 4 calendar years.

Data Source: NSDL (Net Outflows in brackets)

Overall FPI flows for 2025 are still negative at $(6,821) Million. This comprised $(9,520) Million of net selling in equities, offset by $2,699 Million of net buying in debt. Within equities, secondary market selling was to the tune of $(12,681) Million; offset by IPO buying of $3,161 Million. IPO flows and debt inflows continue to hold up the FPI flow story.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to July 18, 2025, FPIs were net sellers in equities worth $(1,090) Million.

• India CPI inflation fell to a 77-month low of 2.10% for June 2025, with food inflation slipping into the negative. Even WPI inflation slipped into the negative after 17 months, raising hopes that the RBI may take up one more rate cut in calendar 2025.
• India goods trade deficit narrowed by nearly 26% in the last 2 months to $18.78 billion for June 2025. The exports were lower MOM, but imports fell sharply due to lower value of imports of crude oil and gold. Overall deficit for June 2025 is at just $(3.52) billion.
• India has rejected the US proposal to impose secondary sanctions for importing oil from Russia. India has underlined that energy security is paramount and that cannot be compromised. The 100% tariff threat came from Mark Rutte, Secretary General, NATO.
• Reliance Industries announced a 76% growth in net profits for Q1FY26, on the back of ₹8,900 crore one-time gain from sale of Asian Paints shares. Even without that, profit growth was 25%. O2C did better on margins, but the but thrust came from Jio.
• As Viceroy Research piles up short sell positions on Vedanta Resources, the company has dismissed allegations in the report. However, asset stripping, funding dividends via debt, and other corporate governance issues on group structure, have been challenges.

Let us turn to the granular FPI flow story in last 4 weeks.

DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS

Here is the last 4 rolling weeks data on FPI flows in rupee terms and in dollar terms.

Data Source: NSDL

• In previous 7 weeks, FPIs saw net inflows of $614 Million, $497 Million, $1,522 Million, $130 Million, $391 Million; net outflows $(1,025) Million, and net inflows of $705 Million. The week to July 18, 2025, saw net FPI selling of $(1,090) Million.
• In last 4 rolling weeks, total net FPI inflows into equities were to the tune ₹13,259 Crore or $1,543 Million. Debt market flows continued to be positive in July 2025.

In the coming week, FPI flows are likely to react to several specific factors. There is the core sector data coming up on Monday and the HSBC Compositive PMI in the middle of the week. In addition, Fed speak by Jerome Powell and Michelle Bowman will also be closely tracked for cues ahead of the 30-July meeting. However, the immediate concerns would be the Indo-US trade deal and secondary sanctions on Russian oil buyers!