Mumbai: The foreign investors’ inflows in the Indian domestic equities is bouncing back and the long-term outlook for markets is robust, a report showed. The weakness in the rupee may keep foreign portfolio investors (FPIs) away, with a return expected only after the currency stabilises for an extended spell (1-2 months), according to the note by Emkay Global Financial Services.“However, we believe this is a temporary wobble. The long-term outlook for domestic flows is robust, in our view,” it added.

Low nominal interest and withdrawal of tax benefits to debt mutual funds have made fixed income an unattractive option for long-term savers. Unless there is a deep and extended market correction (unlikely, in our view), we expect continued and sustained domestic flows into equities, the note explained.

The share of equities in household savings consolidated in the last 12 months after a 9-year surge from 17 per cent to 30 per cent (between March 2016 and September 2024).The consolidation was largely attributed to market action, with the BSE-500 correcting 6.6 per cent over September 2024-September 2025, though flows remained robust during this period. “We see this as a blip and expect the share to rise to 45 per cent over the next 10Y, with month-to-month (M2M) impact playing a major role.