Foreign Investors Return to Indian Markets with ₹1,751 Crore Inflows This Week — A Sign of Renewed Confidence
After several weeks of relentless selling pressure, foreign investors (FPIs) have finally turned net buyers in Indian equity markets — a move that could signal the early signs of a sentiment reversal.
According to National Securities Depository Limited (NSDL) data, FPIs pumped in a net ₹1,751 crore into Indian markets during the week of October 6 to October 10, 2025, marking their first positive inflow in over a month.
This turnaround comes as a relief to investors who have been worried about continuous foreign outflows since mid-August, triggered by global trade tensions, US inflation uncertainty, and high domestic valuations.
Weekly Breakdown: From Selling to Buying
During the start of the week, foreign investors continued their selling spree — dumping Indian equities worth ₹1,584 crore on October 6 and another ₹1,471 crore on October 7.
But from October 8 onward, the mood shifted dramatically.
They became aggressive buyers, investing:
- ₹1,663 crore on October 8
- ₹737 crore on October 9
- ₹2,406 crore on October 10
This sharp reversal resulted in a net cumulative inflow of ₹1,751 crore for the week, according to data analyzed by Ajit Mishra, Senior Vice President (Research) at Religare Broking.
“The shift underscores improving foreign investor sentiment toward Indian equities, supported by global stability and domestic resilience. Sustained FII inflows from here could further strengthen the market trend, provided global risk appetite remains intact and earnings momentum continues,” Mishra noted.
🌍 Why Are FPIs Returning Now?
The turnaround comes amid a mix of global and domestic factors that seem to be aligning favorably for India:
1. Stabilization in Global Risk Sentiment
After a turbulent phase triggered by President Trump’s tariff escalation on China and other trading partners, global markets are showing early signs of stabilization.
The expectation that the US Federal Reserve may delay further rate hikes has improved risk appetite in emerging markets like India.
2. India’s Strong Macroeconomic Story
Despite persistent FPI outflows in the past few months, Domestic Institutional Investors (DIIs) — particularly mutual funds and insurance companies — have remained net buyers, cushioning the market from major corrections.
India continues to be a structural growth story, supported by:
- Robust GDP growth above 7%
- Softening crude oil prices (down nearly 24% from their 52-week highs)
- A stable rupee, and
- Strong corporate earnings momentum
3. Earnings Season Optimism
With Q2 FY26 earnings season underway, expectations of solid performance in banking, auto, and consumer sectors have further lifted sentiment.
💹 The Bigger Picture: 2025 FPI Trends
Despite this week’s inflow, foreign investors remain net sellers for 2025 so far.
As per NSDL data:
- Net outflow in September: ₹23,885 crore
- Net outflow in October (so far): ₹2,091 crore (after adjusting for the recent inflow)
- Total outflow in 2025: ₹1,56,611 crore
In fact, FPIs have been net sellers in every month of 2025, except April, May, and June, with January recording the highest outflow of ₹78,027 crore.
The prolonged outflows were primarily due to:
- Trump’s aggressive tariff measures reigniting trade war fears
- High valuations of Indian companies compared to other emerging markets
- Uncertain global trade outlook, which reduced foreign risk-taking
While global FPIs were cautious, domestic investors stepped up.
Mutual funds, retail investors, and pension funds have consistently absorbed foreign sell-offs, keeping market stability intact.
This resilience was visible in the Nifty 50, which has gained nearly 3% in October so far, despite volatility in global markets.
“The steady support from DIIs and retail investors is a major factor behind the Indian market’s ability to absorb external shocks. FPIs are now realizing that India remains a long-term growth opportunity even during global uncertainty,” said a senior market strategist from Mumbai.
🔮 What Lies Ahead?
The return of foreign inflows could mark the start of a sentiment recovery phase, but experts caution that its sustainability depends on three key factors:
- Global Stability: Any renewed escalation in the US–China tariff war or geopolitical tensions could quickly reverse the trend.
- Corporate Earnings: Strong Q2 results will be critical to justify India’s premium valuations and keep FPIs interested.
- US Inflation and Dollar Index: A stronger dollar or stickier US inflation could divert flows back to developed markets.
That said, India continues to offer a compelling long-term growth story, especially with falling crude prices, easing inflation, and steady GDP growth.
If these conditions persist, FPI inflows could accelerate in the coming weeks, helping the markets move toward new all-time highs before year-end.
🧠 Key Takeaways
| Indicator | Data / Trend | Implication |
|---|---|---|
| Weekly FPI Flow (Oct 6–10) | ₹+1,751 crore | First net inflow after several weeks of selling |
| FY2025 Total FPI Flow | ₹–1,56,611 crore | Still negative overall for the year |
| DIIs’ Role | Continuous buying | Provided strong market stability |
| Crude Oil Prices | Down ~24% YoY | Positive for India’s inflation & rupee |
| Nifty Performance (Oct so far) | +3% | Domestic strength visible |
| Outlook | Cautiously positive | Dependent on global stability & earnings |
💬 Final Thoughts
The return of foreign investors to Indian equities is more than just a data point — it’s a reflection of confidence returning to one of the world’s fastest-growing economies.
While short-term volatility may persist due to global headlines, India’s macroeconomic strength, domestic liquidity, and corporate growth cycle are providing a strong foundation for sustained market performance.
As global investors diversify away from China and seek stability, India is emerging as the most preferred emerging market destination — not just for 2025, but for the decade ahead.
Disclaimer:
This blog is for informational and educational purposes only. It does not constitute financial advice or investment recommendations. Please consult a certified financial advisor before investing in the markets.