Why have FIIs been selling so heavily in the stock markets in the week since 24 February?

If you look at the FII date for 24 Feb, 25 Feb and 26 Feb, they have sold close to Rs.7,000 crore worth of equities in this period. That is nearly 70% of the flows that came into equities in the first 2 weeks of February. Of course, Feb 2020 flows are still positive but if the selling continues like this week then there could be some serious concerns on the FII flows front. That is the big concern. The real challenge is that FIIs are selling in the market largely because there is global selling of equities in emerging markets and that is taking its toll on FII sentiments. Most FIIs are turning risk off in the last week of February as is evident from the sell-off in all global markets. Apart from the China virus story, FIIs are also worried that the global growth could actually slow down sharply for the year, creating genuine valuation risks. That is also evident from the sharp rally in the price of gold and fall in the price of oil.