The foreign investors turned net buyers of Indian equities in July after four straight months of selling and invested over ₹15,157 crore so far this month following improving domestic macroeconomic indicators, a stable rupee and better global risk sentiment.
The latest inflow follows net outflows of ₹49,340 crore in June, ₹32,963 crore in May, ₹60,847 crore in April and a massive ₹1.17 lakh crore in March, according to data from the Central Depository Services (India) Ltd (CDSL).
Prior to the selling spree, foreign portfolio investors (FPIs) had invested ₹22,615 crore in Indian equities in February.
Despite July’s turnaround, foreign investors have pulled out a net ₹2.6 lakh crore from Indian equities so far in 2026, exceeding the ₹1.66 lakh crore withdrawn in the same period of 2025.
Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India told news agency Press Trust of India (PTI) that the reversal in July reflects improving global risk appetite, easing concerns over energy prices following the de-escalation of geopolitical tensions earlier this month, and renewed confidence in India’s macroeconomic fundamentals.
Furthermore, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, told PTI that improving domestic macroeconomic conditions and the rupee’s stability have played a key role in attracting foreign inflows.
He added that weakness in the semiconductor trade and FPIs turning sellers in markets such as South Korea also redirected flows towards India.
Srivastava noted that after a period of market consolidation, valuations have become more reasonable, prompting foreign investors to selectively increase exposure to high-quality Indian firms.
He, however, cautioned that while July’s sharp reversal is encouraging, the sustainability of FPI inflows will depend on global developments and the resilience of India’s domestic growth story.
Meanwhile, debt continues to attract growing foreign interest. FPIs invested ₹6,625 crore in debt securities through the Fully Accessible Route (FAR) and ₹3,228 crore through the general route during July.
Vijayakumar said the government’s changes to the taxation of debt investments have made Indian debt more attractive to FPIs while contributing to the rupee stability.
Stock market last week
Despite a strong rally in the last two trading sessions, the Indian stock market ended the week of July 10 on a negative note, as investor sentiment remained cautious amid persistent geopolitical concerns. During the week, the NIFTY50 declined by 63.95 points, or 0.3%, while the BSE SENSEX dropped 194.52 points, or 0.3%.
The broader markets fared better than the benchmark indices, with the NIFTY Midcap 100 and NIFTY Smallcap 100 rising 1.4% and 1.3%, respectively.
On the sectoral front, realty stocks led the gains during the week, with the NIFTY Realty index surging 5.4%. This was followed by the NIFTY Consumer Durables index, which rose 3.7%, and the NIFTY IT index, up 2.1%. The NIFTY Metal and NIFTY PSU Bank indices also ended in positive territory, advancing 0.7% and 0.5%, respectively.