It was not just that the foreign portfolio investors (FPIs) sold Indian equities worth $2.5 billion in December. For year 2025 as a whole, FPIs were net sellers in equities to the tune of $18.8 billion. This is despite fairly robust inflows into large IPOs during the year worth almost $8.2 billion, so secondary market selling by FPIs has been close to $27 billion in year 2025. This FPI selling has been triggered by several factors like valuation worries, earnings slowdown, geopolitical risk, delays in the Indo-US trade deal as well as a weak rupee at ₹90/$. The table captures the break-down of the $2.5 billion of selling by FPIs in December sector wise. FPI assets under custody (AUC) is well below Sep-24.
 

1. The first segment (green shade) shows the sectors that saw positive flows from FPIs in December 2025 overall. These include secondary markets and IPO purchases. 
2. The second segment (yellow shade) are the neutral sectors where there were no clear trends in FPI buying or selling during the month of December 2025. 
3. The last segment (pink shade) are the sectors that saw the maximum FPI selling in the month of December, with BFSI worst hit with $1.12 billion of net selling by FPIs. 
4. Unlike previous months, when the FPI trends were driven by domestic business versus global businesses, this time it is more of year-end sectoral adjustments. 

As stated earlier, there was no domestic versus global approach to FPI action in December. In most cases, it did look like a year-end adjustment. 

1. In terms of positive flows, consumer services are largely dominated by the ecommerce players. Here the flows were from secondary buying and Meesho IPO.
2. Another positive sector has been metals, where there are expectations of a shift from precious metals to industrial metals. China recovery hopes are gaining ground too.
3. Oil & gas buying was largely led by low crude prices amid oversupply concerns. The buying was focused on oil marketers, on the hopes of better marketing margins.
4. On the downside, it is hard to pinpoint a reason for selling in BFSI. Being the largest sector by AUC in India, it looks more like year-end portfolio adjustment by FPIs.
5. FMCG selling had several triggers. While demand has been slow, the GST impact and the recent Sin Tax on cigarettes have also played a key part in the FPI selling.
6. Services selling was largely dominated by FPI selling in airline stocks. After the Indigo fiasco, FPIs are a lot more cautious on aviation and transport stocks. Also, airlines are likely to widen their losses in FY26, which could have triggered the selling. 

Unlike the last few months, the focus has not been so much on domestic versus global stories. Buying and selling was determined more by profit booking considerations and year-end adjustment to portfolios. January FPI data should give a clearer idea.