Indian Stock Market Flat Amid Foreign Outflows and Visa Concerns

Post by : Monika

On Thursday, September 25, 2025, India’s stock market remained mostly flat after experiencing four consecutive days of losses. The Nifty 50, which is a benchmark index of the top 50 companies listed on the National Stock Exchange, fell slightly by 0.1% to 25,032.3 points. At the same time, the BSE Sensex, another major stock index representing 30 prominent companies, dropped by 0.11% to 81,629.98 points.

This limited movement shows that investors are cautious. There is no clear direction for the market at the moment, as many factors are affecting the confidence of investors. Some sectors have gained slightly, while others have fallen. Overall, the market has been steady, with no major upward or downward trend.

Reasons Behind the Market Behavior

Several key reasons explain why the Indian stock market is not showing strong movement:

Foreign Investors Selling Stocks:
Foreign investors, also called foreign institutional investors (FIIs), have been selling Indian stocks recently. On Wednesday, September 24, 2025, they sold shares worth 24.26 billion rupees, which is about $273 million. Foreign investors often have a significant impact on stock markets. When they sell shares, it can reduce the overall market price and create uncertainty.

In September 2025, foreign investors have already withdrawn a total of $1.32 billion from Indian stocks. This consistent selling is keeping the market cautious and preventing it from rising. Investors are worried about further foreign outflows, which could continue to pressurize the stock market.

New U.S. Visa Fee Concerns:
Another reason affecting the market is the announcement by the United States regarding H-1B visas. The U.S. government has introduced a new fee of $100,000 for H-1B visa applications. This type of visa is crucial for Indian IT companies, as it allows their employees to work in the United States.

The high fee could make it more expensive for IT companies to send employees abroad. Investors are concerned that this could reduce profits for Indian IT firms and affect their stock prices. Major IT companies in India, such as Infosys, Wipro, and TCS, rely heavily on U.S. contracts, and this fee change may have a direct impact on their business operations.

• Sector-Wise Performance in the Stock Market
• The Indian stock market did not move much overall, but different sectors showed varied performance:

Energy Stocks:
Shares of energy companies rose by around 0.4% on Thursday. The increase is mainly due to higher global oil prices. Companies like ONGC (Oil and Natural Gas Corporation) and Oil India benefit from rising crude oil prices because they earn more from the sale of oil and gas.

Consumer Goods Stocks:
Companies that produce consumer goods, including food and beverages, saw a slight gain of 0.3%. This rise came after HSBC, a global bank, upgraded the ratings of some consumer goods companies. Investors often respond positively to rating upgrades, seeing them as a sign of good performance and potential profit growth.

Automobile Stocks:
Stocks of automobile companies, such as Tata Motors, fell by 0.7%. Tata Motors, in particular, lost 2.5% of its value after reports emerged about a cyberattack at its Jaguar Land Rover unit. Such incidents can create fear among investors, as they can lead to operational problems and financial losses.

Small and Mid-Cap Stocks:
Smaller companies, which are classified as small and mid-cap stocks, experienced a minor rise of 0.1%. Some individual companies showed significant gains. For example, Fineotex Chemicals’ stock jumped by 14.3% after announcing plans for a dividend, a stock split, and a bonus issue. Similarly, Newgen Software’s stock rose by 5% after the company secured two new contracts.

Investor Sentiment and Market Trends

Market experts say that investor sentiment remains cautious due to multiple factors. Ajit Mishra, a senior research analyst at Religare Broking, said that the market is being influenced by three main elements:

• U.S. Trade Tariffs: Ongoing tariffs between the U.S. and other countries create uncertainty for Indian exporters.
• Visa Reforms: Changes in U.S. visa policies, like the new H-1B fee, affect Indian IT companies that rely on sending employees abroad.
• Foreign Outflows: The consistent selling of Indian stocks by foreign investors reduces market confidence and increases volatility.

According to Mishra, while the market may experience some short-term recovery, it is unlikely to see major gains until Indian banks and IT companies show stronger performance. Investors are watching these sectors closely for signs of stability and growth.

Impact on Banks and Financial Institutions

Bank stocks, especially those in the private sector, have been under pressure. Any slowdown in the banking sector can affect the overall market sentiment. Banks are closely linked to economic activity, lending, and investment. If banks report weaker results or face challenges like rising bad loans, it can make investors cautious.

Effect on IT Companies

IT companies in India are particularly sensitive to U.S. policies because a significant portion of their revenue comes from American clients. The new H-1B visa fee may increase operational costs and reduce profit margins. Investors are worried that this could impact stock prices and earnings reports in the coming quarters.

Companies like Infosys, TCS, Wipro, and HCL Technologies are keeping a close eye on the situation. Analysts say that any delays or changes in U.S. visa approvals could affect project timelines and revenue growth. This is why IT stocks are one of the most watched sectors by investors during times of policy changes.

• Global Factors Affecting Indian Stocks
• Apart from domestic concerns, global factors are also influencing the Indian stock market:
• Oil Prices: Crude oil prices directly affect energy stocks and the cost of fuel in India. Rising oil prices benefit oil-producing companies but increase costs for industries and consumers.
• Global Economic Trends: International economic conditions, such as interest rates, inflation, and trade agreements, impact foreign investment in India.
• Geopolitical Tensions: Conflicts or uncertainties in regions like the Middle East can affect energy prices and investor confidence worldwide.

Market Predictions and Analyst Opinions

Market experts predict that the Indian stock market may continue to move cautiously in the near term. While some sectors may show gains, the overall market is likely to remain flat until foreign outflows decrease and U.S. policy concerns stabilize.

Analysts advise investors to focus on sectors with strong fundamentals, such as energy and consumer goods, while being cautious about IT and automobile stocks that may face short-term challenges. Diversification and careful investment strategies are recommended in such an uncertain environment.

the Indian stock market opened flat on Thursday, September 25, 2025, after four days of losses. The Nifty 50 fell slightly by 0.1%, and the BSE Sensex declined by 0.11%.

• The main reasons for the cautious market include:
• Continuous selling by foreign investors.
• New U.S. visa fees affecting Indian IT companies.
• Concerns about trade tariffs and global economic conditions.

While energy and consumer goods stocks gained slightly, automobile and IT stocks showed weakness. Smaller companies had mixed performance, with some stocks gaining significantly due to dividends, contracts, or bonus announcements.

Experts suggest that the market may have limited recovery until banks and IT companies show strong performance. Investors are watching the situation closely and remain cautious in their trading decisions.

The Indian stock market’s behavior reflects a combination of domestic and international factors. It shows how global events, policy changes, and investor behavior all influence stock prices. For now, the market remains flat, but careful observation and analysis will be necessary to understand future trends.

Indian stock market 2025 Foreign investors India H-1B visa fee impact