Foreign Investments Give the Stock Market a Fresh Boost

Foreign Portfolio Investors (FPIs) have made a strong comeback to Indian equities, investing ₹84,290 crore during the first 15 days of November. The inflow comes after several months of significant withdrawals and is being viewed as a positive development for the domestic stock market. Market experts attribute the renewed interest to several global and domestic factors, including the correction in artificial intelligence (AI) stocks worldwide, falling crude oil prices and attractive valuations of large-cap companies. FPIs had withdrawn ₹34,843 crore from Indian markets in October and ₹35,861 crore in September, reflecting the cautious approach adopted by foreign investors in recent months.

Favourable global developments also supported the return of foreign funds. During the first week of November, crude oil prices reportedly declined by around 13% from their recent highs, bringing the price to approximately $97 per barrel and improving investor sentiment. Selling pressure in global AI stocks and the relatively attractive valuations of large companies further encouraged foreign investors to increase their exposure to Indian equities. Between November 2 and 13, FPIs invested ₹84,290 crore in domestic stocks. Following these inflows, foreign institutional investors' net outflows for the year, which had exceeded ₹3 lakh crore, reportedly narrowed to around ₹2.1 lakh crore. The Nifty also crossed the 25,000 mark. Going forward, experts believe that US Federal Reserve interest-rate decisions, crude oil prices, the Iran-Gulf conflict, fluctuations in the rupee and expectations surrounding RBI interest rates will remain key factors influencing market movements.