FPIs sustain buying on improving fundamentals

New Delhi: Foreign Portfolio Investors (FPIs) have accelerated buying in Indian equities, infusing Rs 23,544 crore so far in August as improving quarterly earnings, a stable rupee and better market prospects lift sentiment.

The inflow follows Rs 20,200 crore of FPI investment in July, marking a sharp turnaround after four consecutive months of heavy selling.

FPIs had withdrawn Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April and a massive Rs 1.17 lakh crore in March. Prior to the selling streak, they had invested Rs 22,615 crore in February, according to CDSL data.

Despite the recent buying, foreign investors remain net sellers in Indian equities in 2026, having withdrawn around Rs 2.3 lakh crore so far. This exceeds the Rs 1.66 lakh crore outflow recorded during the entire 2025.

“The factors that are driving the FPIs back to the Indian market are: earnings growth revival as reflected in Q1 results, FPI withdrawal from the ‘chip trade’, rupee stability and the impressive growth prospects of companies in the broader market,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments, said. He noted that FPIs were not buying attractively valued leading large banking or IT stocks but were selectively investing in mid-caps despite elevated valuations.

Market participants will closely track crude oil prices and developments in the ongoing US-Iran geopolitical tensions in the coming week, Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, said.