Foreign investors turned net buyers from net sellers in October after a prolonged spell of persistent outflows in the last three months.
Supported by resilient corporate earnings, a rate cut by the US Federal Reserve, and hopes of US-India trade talks taking shape, Indian equities witnessed a net infusion of ₹14,610 crore in the month of October, data from depositories showed.
This renewed inflow marks a notable shift in investor sentiment, reflecting fresh confidence among global investors towards Indian markets as the country’s GDP shows strong growth.
The outflows had amounted to ₹23,885 crore-loss in September, ₹34,990 crore in August, and ₹17,700 crore in July, as per data from depositories.
Explaining the change, Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, said the reversal was driven by improved risk sentiment and attractive valuations, following the recent correction and resilient corporate earnings across key sectors.
The turnaround also coincided with easing inflation, expectations of a softening interest rate cycle, and supportive domestic reforms, such as GST rationalisation, which further strengthened investor confidence, he added.
Also Read: FPIs turn buyers in October after three-month withdrawal streak
Looking ahead, Srivastava said the sustainability of this trend will depend on continued macro stability, a benign global environment, and consistent corporate earnings in the coming quarters.
Vaqarjaved Khan, Senior Fundamental Analyst, Angel One, agreed that the latest inflows were “supported by companies posting better Q2 FY26 results, the 25 bps rate cut by the US Fed, and optimism around US-India trade talks materialising soon”.
While the net FPI inflow reflects a “clear sign of earnings recovery”, sustained demand conditions will result in better earnings, which in turn will make valuations fair, noted VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
“In such a scenario, FPIs are likely to remain buyers,” he said.
Khan believes that FPI inflows could continue in November as outflows from July to September, totalling more than ₹77,000 crore, were largely driven by global headwinds, which now seem to be settled after both India and the US signalled towards progress in trade negotiations.
However, the quantum of FPI flows will still depend on the timing of the trade deal, the remainder of the Q2 FY26 results, and any further easing signals from the US Federal Reserve, he cautioned.
Despite the recent uptick in equity inflows, FPIs have still withdrawn around ₹1.4 lakh crore so far in 2025.
Meanwhile, in the debt market, FPIs invested about ₹3,507 crore under the general limit while withdrawing ₹427 crore through the voluntary retention route in October.
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