FIIs invest ₹18,000cr in Indian equities this May—What's the reason?
What's the story
Foreign Institutional Investors (FIIs) have shown renewed confidence in Indian equities by turning net buyers for the second consecutive month.
In May, they pumped in a whopping ₹18,082 crore. This comes after an earlier investment of ₹4,243 crore in April.
The change comes after a period of heavy selling earlier this year due to global factors such as a strong Dollar and concerns over global interest rate movements.
Market dynamics
FII selling trend and market response
In the first three months of 2025, FIIs were consistent sellers in the Indian market.
The trend began in January when the dollar index peaked at 111 mid-month.
That month alone, they sold equities worth ₹78,027 crore amid fears over global interest rate movements, and a stronger Dollar.
However, as global macroeconomic indicators started easing with signs of a cooling inflation and reduced interest rate volatility in the US, selling pressure eased too.
Strategic insights
Global factors influencing FII inflows
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, has attributed the recent FII inflows to global factors like slowing growth in the US and China.
He also cited declining inflation and steady domestic macroeconomic indicators as reasons for this trend.
"Global macros like declining dollar, slowing US and Chinese economies and domestic macros like high GDP growth and declining inflation and interest rates are the factors driving FII inflows into India," he said.