Foreign Institutional Investors (FIIs) are making a strong return to Indian stock markets after months of heavy selling. Over the last 13 trading sessions since October 16, FIIs have invested nearly ₹39,404 crore in Indian equities, creating optimism that the market may be entering a stronger phase. This sharp turnaround comes after foreign investors had reduced their exposure to Indian stocks to multi-year lows.
The renewed buying has helped lift market sentiment, with the Sensex crossing 78,900 points and the Nifty moving above 24,400. Analysts believe several factors are supporting this change in investor behaviour. These include falling crude oil prices, improving corporate earnings, attractive market valuations, a weaker US dollar and expectations of possible tax benefits for foreign investors.
Global brokerage Nomura said India’s appeal is improving as company earnings remain strong and valuations are still below post-pandemic averages. Indian equities have also outperformed many global markets in recent weeks, further attracting foreign funds.
Another key support for the market is the decline in Brent crude oil prices, which have fallen around 10% to nearly $94 per barrel. Lower oil prices are positive for India as they can help reduce inflation and support economic growth.
While investors remain cautious, the latest FII inflows have raised hopes that foreign money could continue supporting Indian equities and strengthen the ongoing market rally.
