After a brief respite in December, foreign portfolio investors (FPIs) have resumed their selling spree in January, shedding nearly ₹12,000 crore worth of Indian stocks so far. The shift in sentiment isn’t entirely new. FPIs had been net sellers during October and November, pulling out close to ₹1.60 lakh crore before turning net buyers in December. However, even in December, the enthusiasm faded quickly, as intensified selling in the latter half led to a 2% drop in the Nifty 50 index. This persistent selling pressure has taken a toll on FPI ownership in Indian equities, which slipped to 16.1% in December 2024—a 12-year low—down from 16.8% in the same period a year earlier. The total Equity Assets Under Custody (AUC) held by FPIs fell to ₹71.1 trillion in December, compared to ₹71.9 trillion in November, per a JM Financial report. The January selloff appears to be driven by a mix of factors. Concerns about the HMVP virus and lackluster earnings updates for the December quarter have dampened investor sentiment. Global cues are also adding pressure. A dollar index at 109 and a U.S. 10-year bond yield hovering around 4.67% have made Indian equities less appealing to foreign investors. Market volatility is expected to persist as investors digest Q3 results, await Union Budget announcements, and keep an eye on potential policy shifts in the U.S. While the long-term fundamentals of the Indian economy remain solid, the immediate outlook appears clouded by uncertainties that could keep foreign investors on edge.