New Delhi: With the valuation differential coming down and Indian earnings likely to improve in FY27, foreign portfolio investors (FPIs) are likely to slow down selling going forward, analysts said on Saturday. Sustained FPI selling continued in September with the sell figure through exchanges touching Rs27,163 crore.

However, in keeping with the long-term trend of buying through the primary market, they bought equity for Rs3,278 crore in September.“The selling in September takes the total sell figure for 2025 to Rs198,103 crore. This massive selling on top of the Rs 121,210 crore selling in 2024 takes the total FII selling to Rs 319,313 crores for the last 21 months,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

Higher valuation in India and cheaper valuations elsewhere have been the principal drivers behind the FII strategy.According to analysts, the market enters the new week with cautious optimism.The RBI’s supportive policy stance and strong GST collections offer domestic comfort, though volatility could persist due to FII outflows and global headwinds. Investors should closely track Q2 earnings, particularly from IT and banking heavyweights, for cues on sectoral leadership.

A buy-on-dips strategy remains advisable, with a preference for domestic cyclicals such as metals, autos, financials, and themes like defence, while selectively adding from other sectors.