Share Market News / The dragon became the market's killer, sucked so many lakh crores from the Indian market

The improvement in China's economy and the bailout package have attracted foreign investors (FPI). Between October 2024 and February 2025, Rs 3.11 lakh crore was withdrawn from the Indian market. Europe also became a center of investment. The slowdown in the Indian economy increased the pressure on the market.

Share Market News: China has made a tremendous comeback in the global market, which has given a severe blow to the Indian stock market. Heavy selling by foreign portfolio investors (FPIs) confirms that the investment trend is shifting from India to China and Europe.

India affected by China's revival

After Kovid-19, there was a negative perception about China globally. India got direct benefit from this, where economic activities and stock market saw strength. For this reason, FPIs invested heavily in the Indian market. However, in the last five months, the selling pressure in the market has increased, making the Indian stock market unstable. The growth rate of the Indian economy has also slowed down during the same period.

FPIs withdrew Rs 3.11 lakh crore

Between October 2024 and February 2025, FPIs have withdrawn about Rs 3.11 lakh crore from the Indian stock market. Although domestic institutional investors (DIIs) have tried their best to fill this gap, the FPI withdrawal was so high that weakness was seen in the market.

Major reasons for FPI withdrawal from the market

Decline in economic growth rate: India's GDP growth has weakened in recent months, which has shaken the confidence of FPI investors.

Reduction in profitability of companies: Indian companies made profits, but their profitability decreased, due to which investors started withdrawing money.

Changing global investment scenario: Due to better opportunities in China and Europe, FPIs have turned towards these markets.

How did FPIs withdraw money from the Indian market?

October 2024: Withdrawal of Rs 94,017 crore

November 2024: Heavy withdrawal continued

December 2024: FPI investment remained positive

January-February 2025: Selling increased again, taking Rs 98,226 crore out of the market.

China's bailout package and economic strength

China issued large bailout packages to boost its economy. In November 2024, China announced a bailout package of $839 billion, which provided relief to provincial governments from debt. Apart from this, the central bank relaxed loan rules to increase liquidity, which gave a boost to the real estate sector.

Europe also became the new destination of FPI

FPI investment from India is not only reaching China but also many countries of Europe.

Germany: $930 million

Switzerland: $824 million

France: $658 million

Netherlands: $344 million

China (February 2025): $573 million

Conclusion

The selling of FPI in the Indian stock market and the increasing investment towards China-Europe clearly shows that global investors are skeptical about the Indian economy. In such a situation, the Indian government and regulators need to focus on policy reforms to attract investment flow back to India.