FPIs reverse 4-month selling spree of Indian equities in July
What's the story
Foreign portfolio investors (FPIs) have turned net buyers of Indian equities in July after four consecutive months of selling. They invested over ₹15,157 crore this month on the back of improving domestic macroeconomic indicators and a stable rupee. The latest inflow comes after net outflows of ₹49,340 crore in June and ₹32,963 crore in May.
Investment history
FPIs withdrew ₹2.6 lakh crore in 2026
Before the recent selling spree, FPIs had invested ₹22,615 crore in Indian equities in February. However, despite July's reversal, foreign investors have withdrawn a net ₹2.6 lakh crore from Indian equities so far this year. This is higher than the ₹1.66 lakh crore withdrawn during the same period last year.
Market dynamics
Factors driving FPI inflows
Himanshu Srivastava of Morningstar Investment Research India attributed the July reversal to an improving global risk appetite and easing concerns over energy prices. VK Vijayakumar from Geojit Investments said improving domestic macroeconomic conditions and rupee stability have been key in attracting foreign inflows. He also noted that weakness in the semiconductor trade and FPIs turning sellers in markets such as South Korea redirected flows toward India.
Investment strategy
Selective increase in exposure to high-quality Indian firms
Srivastava observed that after a period of market consolidation, valuations have become more reasonable. This has prompted foreign investors to selectively increase their exposure to high-quality Indian firms. However, he 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.