FII Returns to Indian Markets, Invests Over ₹10,000 Crore in October

Mumbai (The Uttam Hindu): After months of heavy selling, foreign institutional investors (FIIs) have once again shown confidence in Indian equity markets. According to data from NSDL, between October 7 and October 14, FIIs were net buyers in five out of the last seven trading sessions, purchasing equities worth over ₹3,000 crore in the secondary market. Their participation in the primary market was even stronger, surpassing ₹7,600 crore in investments.

Provisional data from the NSE shows that FIIs continued their buying streak on October 15, acquiring shares worth ₹162 crore. This renewed interest coincides with a steady uptrend in key market indices. Since the beginning of October, both the Sensex and Nifty have gained nearly 3%, while the BSE Midcap index rose 3.4% and the Smallcap index increased by 1.7%.

The sudden reversal in foreign fund flows has surprised many market observers. Some analysts view it as a short-term rebound, while others believe it reflects improved corporate earnings outlook and stable economic conditions in India. This positive shift stands in sharp contrast to the massive outflows seen earlier this year from January to September, FIIs had sold Indian equities worth over ₹2 lakh crore in the secondary market.

The renewed inflows come at a time when the Reserve Bank of India (RBI) and the government have taken several growth-supportive measures, including GST rate cuts, a major repo rate reduction in June, and an improvement in India’s sovereign credit rating by S&P. During the earlier sell-off, Indian markets lagged behind global peers Sensex and Nifty gained only about 3%, while midcap and smallcap indices fell 3% and 4%, respectively.

Currently, optimism is being driven by expectations of a potential India-US trade agreement amid ongoing US-China tensions, and hopes that the US Federal Reserve might cut interest rates later this month. A rate cut could inject additional liquidity into emerging markets and commodities, further supporting investor sentiment.

Experts believe that factors such as a weaker rupee, attractive valuations, and the prospect of double-digit earnings growth for Nifty companies in the second half of FY26 make India one of the most appealing destinations for global investors at present.