FPIs reverse 4-month selling trend with Rs 20,200 cr inflow in July
After four straight months of selling, foreign investors turned net buyers of Indian equities in July, pumping in Rs 20,200 crore, aided by attractive valuations
After four straight months of selling, foreign investors turned net buyers of Indian equities in July, pumping in Rs 20,200 crore, aided by attractive valuations, improving corporate earnings and easing global headwinds.The latest inflow marks a sharp reversal from the preceding months, when Foreign Portfolio Investors (FPIs) withdrew Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April and a massive Rs 1.17 lakh crore in March, according to data from the Central Depository Services (India) Ltd (CDSL).Prior to the four-month selling spree, FPIs had invested Rs 22,615 crore in Indian equities in February.Despite the turnaround in July, foreign investors have pulled out a net Rs 2.54 lakh crore from Indian equities so far in 2026, way more than the Rs 1.66 lakh crore withdrawn during the whole of 2025.Market experts attributed the renewed foreign investor interest to relatively stable domestic markets, reasonable large-cap valuations, improving earnings prospects and a more favourable global environment.V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said excessive volatility in markets such as South Korea and Taiwan, coupled with concentration risk in the "chip trade", is prompting FPIs to look for relatively stable markets like India.The stability of the rupee and fair valuations of India's large-cap stocks are other factors facilitating renewed FPI inflows into the country, he added.Vedant Gupte, Co-Founder and CEO of investment platform Trackk, said improving earnings prospects also strengthened investor sentiment, with June quarter results showing signs of recovery across key sectors.IT stocks, in particular, witnessed a sharp re-rating as better-than-expected earnings helped ease concerns over the impact of artificial intelligence on the sector's growth prospects, he said.At the same time, easing pressure from the US dollar and expectations that US interest rates are near their peak have improved the investment environment for emerging markets, Gupte added.Foreign investor interest was not limited to equities, with the debt market continuing to attract significant inflows during the month.FPIs invested Rs 29,212 crore in debt through the general route and another Rs 3,033 crore through the fully accessible route in July.Going forward, the trajectory of foreign flows is likely to be influenced by both global developments and domestic triggers.Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said investors in the coming month will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions.On the domestic front, the Q1FY27 earnings season and the RBI's monetary policy scheduled for August 5 will remain in focus, he added.
The BriefWire