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In January 2025, financial stocks faced significant selling pressure, with sell-offs totaling over Rs 12,745 crore. This mirrored the outflows seen in the first two weeks of the month. Consumer services and IT stocks also experienced heavy sell-offs, with Rs 4,840 crore and Rs 4,544 crore, respectively. Foreign institutional investors (FIIs) continued their exit from various sectors, including fast-moving consumer goods (FMCG), auto, and capital goods.
The continuous selling by FIIs has led to their ownership in Indian equities dropping to a 12-year low of 16.08%. In contrast, mutual fund ownership has surged, reaching a record high of 10.28%. This shift in ownership dynamics highlights the growing influence of domestic investors in the Indian stock market.
The market sell-off is attributed to multiple factors, including global economic uncertainties, rising interest rates, and geopolitical tensions. These factors have led to increased volatility and cautious sentiment among investors.
Market participants are closely monitoring the situation to assess its impact on the overall market performance and individual stock valuations. The coming months will be crucial in determining whether the market can regain stability or if the sell-off trend will persist.
