- The BSE Sensex closed at 77,501 down by 0.82 % and the Nifty 50 closed at 23,508 down by 0.58 % in January 2025, amid a market pullback.
- Benchmark indices rose over 1% following the Economic Survey 2024-25, projecting India’s GDP growth at 6.3-6.8% for 2025-26, compared to previous estimate of 6.4% and reinforcing confidence in India’s robust economic fundamentals, suggesting that the current investment slowdown is transient.
- The volatility index (India VIX) spiked in January, surpassing a level of 19.01, up from 16.58 in December 2024, indicating heightened market uncertainty due to geopolitical tensions and global economic concerns.
- Foreign Portfolio Investors (FPIs) withdrew Rs 78,027 crore from Indian equities due to rising US dollar and bond yields post-Trump’s re-election, while Domestic Institutional Investors (DIIs) bought Rs 86,591 crore, helping prevent a market downturn.
- FIIs heavily sold in sectors like BFSI ($2.8 billion), IT ($747 million), Oil & Gas ($182 million), and Auto ($672 million), contributing to overall outflows.
- FII ownership in Indian equities has continued its downward trajectory, falling from 20.2% in January 2015 to 16.0% in January 2025, driven by factors like global market volatility, rising US interest rates, and slowing economic growth (GDP down from 7.6% in FY2022 to 6.4% in FY2025), high stock valuations (P/E ratio at 21x vs global 16x), corporate governance issues, and currency risks (INR down 27% against the USD) highlighting overall sustained selling pressure.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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