Foreign Investors Return to Indian Stock Markets with Heavy Buying

Foreign Portfolio Investors (FPIs) have returned to Indian equity markets after two consecutive months of heavy selling. During the six trading sessions between November 2 and 9, they invested a net ₹53,739 crore in domestic equities, providing a positive signal for the Indian stock market. Previously, FPIs had withdrawn ₹34,843 crore in October and ₹35,861 crore in September. Meanwhile, sharp declines in AI-driven markets such as the US, South Korea, Taiwan and Japan, concerns over returns from massive data-centre investments and fears of tighter AI regulations have influenced global investment strategies. Against this backdrop, India is attracting foreign investors as an alternative market.

India's relatively lower dependence on AI hardware, attractive valuations of large-cap stocks following recent market corrections and strong quarterly corporate earnings have encouraged foreign buying. FPIs have focused on heavyweight stocks in financial services, banking, IT, automobiles and telecommunications. They have also invested ₹7,558 crore in Indian government bonds through the Fully Accessible Route (FAR), supporting the rupee and bond markets. However, FPIs remain net sellers to the tune of ₹2.41 lakh crore since January this year. Whether their buying momentum continues in the coming weeks will be crucial. Sustained inflows could help benchmark indices such as the Nifty and Sensex outperform mid-cap and small-cap stocks in the near term.