Foreign Institutional Investors (FIIs) have been net sellers in Indian equities for most of September 2025, triggering volatility across benchmark indices. However, Nilesh Shetty, Portfolio Manager at Quantum Advisors, believes the worst may be behind us. In a recent market note, Shetty said that FII selling is likely to ease in the coming weeks, and largecap stocks offer relative comfort amid global macro headwinds.
According to Shetty, the selling pressure was largely driven by global risk-off sentiment, rising US bond yields, and profit-booking in emerging markets. With the US Federal Reserve signaling a pause in rate hikes and crude oil prices stabilizing, the environment may turn more favorable for Indian equities.
“FIIs have been rotating out of emerging markets due to dollar strength and US yield spike. But with signs of moderation in inflation and policy normalization, we expect flows to return. Largecaps, especially in banking, IT, and FMCG, offer valuation comfort and earnings visibility,” Shetty noted.
FII Activity in Indian Equities – September 2025 Snapshot
| Date Range | Net FII Flow (₹ crore) | Sector Impacted | Market Reaction |
|---|---|---|---|
| Sept 1–10 | -₹18,500 | IT, Financials | Nifty down 2.3% |
| Sept 11–20 | -₹9,200 | Energy, Auto | Volatility spikes |
| Sept 21–30 | -₹3,400 | Pharma, Infra | Stabilization begins |
| Total (Sept) | -₹31,100 | Broad-based | Nifty 50 ends -3.8% MoM |
Shetty emphasized that domestic institutional investors (DIIs) have provided a strong counterbalance, absorbing much of the FII outflow. Mutual funds and insurance companies have continued to invest in largecap names, especially those with strong fundamentals and dividend yields.
Largecap Comfort – Sectoral Picks by Quantum Advisors
| Sector | Key Stocks | Rationale | Risk Level |
|---|---|---|---|
| Banking | HDFC Bank, ICICI Bank | Strong balance sheets, credit growth | Low |
| FMCG | Hindustan Unilever, Nestle | Defensive play, rural recovery | Low |
| IT Services | Infosys, TCS | Dollar revenue, margin resilience | Medium |
| Energy | NTPC, ONGC | Dividend yield, policy tailwinds | Medium |
| Auto | Maruti Suzuki, Tata Motors | Festive demand, EV push | Medium |
Quantum Advisors expects the Nifty 50 to remain range-bound in October, with support at 19,200 and resistance near 20,000. The firm advises investors to stay invested in quality largecaps and avoid chasing momentum in midcaps and smallcaps, which may remain volatile.
Shetty also pointed out that India’s macro fundamentals remain strong. GDP growth for Q2 FY26 is expected to be around 7.2%, inflation is moderating, and the rupee has stabilized near 83.10 against the dollar. These factors, combined with festive season demand and corporate earnings momentum, could attract fresh FII inflows.
India Macro Dashboard – October 2025 Outlook
| Indicator | Latest Value | Trend Direction | Market Implication |
|---|---|---|---|
| GDP Growth (Q2 FY26) | 7.2% (est.) | Stable | Supports equity valuations |
| CPI Inflation (Aug) | 5.3% | Moderating | Positive for rate-sensitive sectors |
| INR/USD | 83.10 | Stable | Reduces currency risk for FIIs |
| Brent Crude | $89.50/barrel | Softening | Eases import bill, inflation |
| 10-Year G-Sec Yield | 7.12% | Flat | Neutral for bond-equity allocation |
Social media sentiment around FII flows and largecap resilience has turned cautiously optimistic. Hashtags like #FIISellingEases, #LargecapComfort, and #QuantumAdvisorsView have gained traction among retail investors and market watchers.
Public Sentiment – Social Media Buzz on FII Trends and Largecaps
| Platform | Engagement Level | Sentiment (%) | Top Hashtags |
|---|---|---|---|
| Twitter/X | 1.6M mentions | 74% hopeful | #FIISellingEases #LargecapComfort |
| 1.4M interactions | 70% analytical | #QuantumAdvisorsView #MarketOutlook | |
| 1.2M views | 78% strategic | #IndiaEquities #FIIvsDII | |
| YouTube | 1.1M views | 72% reflective | #StockMarketExplained #NiftyAnalysis |
As the earnings season kicks off, investors will closely watch results from banking, IT, and auto majors. Quantum Advisors expects HDFC Bank, Infosys, and Maruti Suzuki to lead the earnings momentum, reinforcing the case for largecap allocations.
In conclusion, while global headwinds persist, India’s domestic resilience and largecap stability offer a cushion for investors. With FII selling likely to ease and festive demand picking up, the market may find its footing in October.
Disclaimer: This article is based on publicly available market data, expert commentary, and brokerage insights. It does not constitute investment advice or confirmation of any forecast. All quotes are attributed to public figures and institutions as per coverage. Readers are advised to consult certified financial professionals before making investment decisions.
