Foreign portfolio investors (FPIs) made a strong comeback to the Indian stock market, investing nearly ₹45,970 crore in just five trading sessions after remaining net sellers for the previous two months. This sharp inflow helped the Nifty 50 surge 8.6% during the week, marking its best weekly performance since February 2021. It also reduced the index’s yearly losses and improved overall market sentiment.
The Indian rupee also benefited from the strong foreign inflows, gaining 0.6% against the US dollar and reaching its strongest level since April. Market experts believe the change in investor sentiment was driven by three major factors: falling crude oil prices, improving corporate earnings, and a global shift away from AI-linked stocks.
A correction in technology and AI-related stocks across global markets encouraged investors to move funds into countries like India, which have lower exposure to the AI theme. At the same time, lower oil prices eased concerns around inflation and India’s import bill, making domestic equities more attractive.
Going forward, FPI flows will depend on key global triggers such as US inflation data, crude oil price trends, Federal Reserve commentary, and bond yield movements. Analysts believe these factors will determine whether the recent buying momentum in Indian equities can continue.