On Tuesday alone, foreign portfolio investors (FPIs) purchased equities worth $269 million, as per provisional exchange data.
With the Nifty50 rising for the fifth consecutive session on Tuesday, foreign investors also remained net buyers, having purchased nearly $900 million worth of Indian shares during the period.
Over the past five sessions, the benchmark Nifty50 rose 2.3% to close Tuesday at 25,104.25, supported by renewed foreign inflows. Improved FPI sentiment also bolstered the rupee, which appreciated 0.33% over four sessions to settle at 85.62 against the US dollar on Tuesday.
Market participants attribute the rebound in foreign inflows partly to the Reserve Bank of India’s unexpected 50-basis-point repo rate cut, which is expected to boost net interest margins (NIMs) for banks and accelerate earnings recovery.
Financial services continue to be a major draw for overseas investors, accounting for nearly one-third of FPI holdings, valued at $264 billion as of May 2025. The IT sector comprises another 8.2% of their investments.
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Rajiv Batra, Head of India, ASEAN, and APAC (excluding Japan and China) Equity Strategy at JPMorgan, observed that while FPI flows into India remain uneven, they reflect the broader bearish sentiment across emerging markets. “If investors even marginally reduce their exposure to US equities, markets like India are likely to benefit,” he said.
Batra added that the upcoming June quarter results could prove pivotal, supported by monetary easing and a favourable monsoon, potentially providing a tailwind to both primary markets (IPOs) and secondary market activity.
Furthermore, the recent pickup in foreign buying has helped narrow India’s year-to-date net outflows to $10.3 billion—a notable improvement from nearly $17 billion in mid-April, according to Bloomberg data. Despite the recovery, India continues to record the second-highest outflows among emerging markets, trailing only Taiwan, which has seen net outflows of $11.1 billion.
Other major EMs, such as South Korea and Indonesia, have reported outflows of $8.3 billion and $3.1 billion, respectively, so far this year.
