Investors need to understand who is buying and who is selling, as well as in which sectors, as this helps them understand market sentiments, opportunities, and the risks involved. Investments made by Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) are key indicators. Here is an overview of FII and DII activities for September 2025.FIIs sell-off amid global uncertaintyFor September, Foreign Institutional Investors reported a gross purchase of ₹278,843.46 crore with gross sales of ₹314,144.82 crore, leading to a net outflow of approximately ₹35,301.36 crore from the Indian markets, marking a trend of foreign capital exit. FIIs withdrew funds from sectors such as IT, Consumer Services, and the Power Sector.Why are FII selling? FII selling indicates the global economic sentiment. By monitoring them, Indian investors can gain a better understanding of the picture beyond domestic fundamentals. When foreign investors sell shares in large volumes, it creates supply pressure, which causes stock prices to decline. Heavy FII sellings also increase market volatility, which can be risky for short-term traders.A rising volatility between the US dollar and INR reduced the currency returns, prompting FIIs to pull their funds back to invest in safer markets. The US Fed rate increase has added further to this. Furthermore, the Indian companies, especially the IT companies, have not shown a strong growth rate in recent quarters, which has deterred foreign investors.Geopolitical uncertainties, such as US-India trade concerns, US import tariffs, and a rise in H-1B Visa fees, have also turned investors cautious.DIIs’ Bullish stance on India’s growth storyIn September 2025, DII's gross purchase was ₹326,751.09 crore with gross sales of ₹261,407.50 crore. DIIs were the net buyers in September 2025, with a net inflow of ₹65,343.59 crore.They invested in sectors such as Financial Services, Energy, and Infrastructure, which are considered stable and promising for long-term growth. Major DII contributors were LIC, SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential, and UTI Mutual Fund.Why are DII buying? DII buying reflects the confidence in India’s economic growth and domestic fundamentals. Heavy DII buying indicates that a particular stock or sector is undervalued, signaling to investors that they should consider a long-term investment in that specific stock or industry.While FIIs exited the market, DIIs have acted as a cushion to reduce volatility and a sharp decline in stock prices.Summing it up Sep ‘25BoughtSoldNetFII278,843.46314,144.82-35,301.36DII326,751.09261,407.5065,343.59 (₹ in cr)DIIs balance the rope vs FIIs in the tug of warIn September, both FII and DII engaged in a tug-of-war, with both buying and selling stocks. The month showed that while foreign investors turned their backs from India due to global uncertainties, domestic investors stood firmly having confidence in the market’s growth potential.
