Emkay expects FII selling to ease from April, sees Nifty hitting 25,000-mark by December; check top investment ideas

Foreign institutional investor (FII) selling in the Indian stock market is likely to slow down from April 2025, according to Emkay Institutional Equities. The brokerage expects valuations to stabilise, aided by a peak in the U.S. Dollar Index (DXY) and improving earnings visibility.

So far in 2025, FIIs have been net sellers of equities worth Rs 1,06,445 crore, amid concerns over weak corporate earnings, expensive valuations in the broader market and a strong dollar weighing on the rupee. However, foreign investors turned buyers on Tuesday, picking up shares worth Rs 4,786.56 crore.

"Despite sustained selling pressure, we expect foreign portfolio investor (FPI) activity to stabilise post the first quarter of the calendar year 2025, as earnings forecasts bottom out and valuations turn reasonable. A peak in DXY should also help ease rupee depreciation concerns and support FPI inflows. Additionally, the Reserve Bank of India’s (RBI) liquidity measures could boost domestic equities, particularly benefiting the BFSI sector," Emkay Institutional Equities said in a note.

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