After withdrawing billions of rands from the Indian stock market, overseas investors have moderated their sale, which has changed in recent net buyers in recent sessions and supports the leading indexes to stay above key levels. After being just three consecutive months for three consecutive months until September, foreign portfolios (FPIs) delayed their sale in October and changed in net buyers during the last four trading sessions and inflicted a accumulated £ 3.289 in local shares, according to the exchange data. Although the net inflow is significantly lower than the sharp selling in previous months, analysts emphasized this shift in their attitude. What is behind buying FPI? Dr. VK Vijayakumar, investment strategist at Geojit Investments Limited, highlighted two important reasons behind their return. Vijayakumar explained that the valuation gap between India and other markets, which used to be high, has dropped significantly over the past few weeks after the rally in other markets and consolidation in the Indian market. He also pointed out that the expected revival in earnings contributed to FPIs changing their strategy to buy. “The growth and earnings prospects for India have been revised upwards by market experts. The GST cuts and the low-interest regime are expected to increase India Inc.’s earnings in FY27, which will soon start discounting the market,” Vijayakumar said. Meanwhile, the global market sentiment has become negative again with the revival of US China trade tensions, following President Trump’s threat to impose 100 percent rates on imports from China and restrictions on various critical US exports to China. According to Vijayakumar, FPI flow will depend forward on how this renewed trade conflict unfolds in the coming days. The Indian stock market has made subdued returns over the past year due to concerns about rich valuations, higher rates, relentless FPIs and the subdued performance by India Inc., while the most important global markets have repeatedly hit record highs, led by AI and chip-related shares. FPIs sell shares worth £ 1.56 Lakh Crore in 2025 Foreign portfolio investors withdrew £ 23,885 from Indian shares in September and extended their sale line for a third consecutive month. The sale accelerated after raising the H1-B visa fee, which caused great outflow of IT shares. So far this year, foreign investors have downloaded £ 1.56 Lakh Crore, the second highest on record for the January-September period. The only bigger exodus of nine months was in 2022, when FPIs sold £ 1.97 Lakh Crore due to the Russia Carying War, aggressive global rate and a rising US dollar. However, inflows resumed at the end of 2022 after the markets began to price in US rate cuts, which brought the outflow of the full year to £ 1.46 Lakh-Crore. Despite this considerable outflow, the Nifty is 6.61% higher for the year and on track for its 10th annual profit, thanks to continued purchase by domestic institutions. According to exchange data, domestic mutual funds and insurance firms have dumped £ 5.9 lakh into shares, which record the record of the annual inflow. India was one of the first major markets to return after US President Donald Trump announced global rates in April and drew investors who considered the country a safe place amid trading tension. Instead, while other countries have agreed to trade, the US has slapped a 50% tariff on Indian goods, the steepest in Asia, causing massive outflows and putting the local currency a lot of pressure. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions.
FPIs resume buying Indian stocks, adding more than £ 3,200 crore within 4 days. What is the fuel of the comeback?
