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Pause in FPI selling pressure triggers relief bounce in in Nifty, domestic flows remain steady

ICICIdirect Research 10 Oct 2025 DISCLAIMER

MF Flows: Retail inflows far more resilient than market apprehension. Smallcap and Midcap funds continues to command higher share. 
Total Inflows (including NFOs) in the month of September came in marginally lower at Rs 30400 crore as compared to Rs 33400 crore. Ex-NFOs, inflows were down by just 5% at Rs 29700 crore as against Rs 31329 crore in August despite market volatility and range bound trade since last 15 months. (Earlier there was apprehension that once 1-year return becomes Zero, inflows will fall significantly.
After Flexicap (which is a flagship category, inflow at Rs 7000 crore), Midcap and Smallcap Funds continue to saw higher inflows at Rs 5100 crore and Rs 4400 crore respectively.
ETFs continue to saw higher inflows at Rs 8150 crore Vs Rs 7200 crore.
SIP inflows were marginally higher at Rs Rs 29361 crore.
FPIs selling pressure extended towards the quarter end and they sold another 14k crores in the second half of the September month taking the tally to 76k crores for the quarter. However, in the new quarter( Oct onwards) FIIs selling pressure has declined substantially and the selling figure is quite minimal in the first few trading sessions.  The reduced selling pressure helped in sharp recovery in the Nifty.
Interestingly BFSI space saw outflows of just 600 crores despite private sector heavyweight banking names witnessing extreme selling pressure. We believe that money has flown from banking heavyweights to NBFC names as well as PSU banks which have shown significant resilience in the recent market volatility. The positive bias in this space is likely to continue.
Similarly, despite under performance from Reliance, Oil&Gas sector saw  inflows of more than 700 crores. Here also, money seems to be moving towards OMC stocks as decline in crude prices also helped in the positive bias.
While Technology and Pharma sectors saw continued outflow due to ongoing tariff and VISA related concerns as both saw outflows of more than 4k crores. Also, FMCG and Consumer durable space also outflows of 3ki crores each.

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