Foreign Portfolio Investors (FPIs) have infused more than Rs 10,000 crore into Indian equities this week, signalling a renewed overseas interest in the domestic markets following months of sustained outflows.
According to data released by the National Securities Depository Limited (NSDL), between 28 April and 2 May, FPIs invested a total of Rs 10,073 crore into Indian stock markets. This surge contributed to April becoming the first month of net positive FPI inflows in 2025, with net investments amounting to Rs 4,223 crore.
The turnaround is significant, considering that FPIs had offloaded stocks worth Rs 3,973 crore in March. The preceding months saw even steeper withdrawals, with January and February recording net sales of Rs 78,027 crore and Rs 34,574 crore, respectively.
Analysts view this shift as a reflection of restored investor faith in the Indian economy, even as global financial sentiment stabilises. However, this optimism has been tempered by geopolitical uncertainties, particularly heightened tensions at the India–Pakistan border.
Despite the strong foreign inflow, overall market sentiment remained tepid throughout the week. Market participants cited border developments as a key factor limiting the rally.
On Friday, benchmark indices closed in the green, albeit after a turbulent session. The Sensex gained 259.75 points or 0.32 per cent to close at 80,501.99, while the Nifty settled 12.50 points or 0.05 per cent higher at 24,346.70.
Intra-day trading saw sharp swings, with the Nifty 50 rising 120 points and the Sensex surging 520 points before those gains were pared back by closing time.
Market experts said that the conflict backdrop continues to cast a shadow on investor sentiment, holding back a potentially sharper upswing.
“Indian markets are now having the overhang of Indo–Pak tensions, otherwise Indian markets are ready to roll forward on good global cues and sustained dry intestine support. Leadership will move to IT, as global recovery will help that,” said Ajay Bagga, a banking and market expert.
While FPIs appear to be warming up to Indian equities again, the cautious stance adopted by domestic investors reflects the complex interplay of positive economic indicators and geopolitical concerns.
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