FPIs turn aggressive buyers in India amid domestic market resilience, global AI shocks

New Delhi: Foreign portfolio investors (FPIs) have turned aggressive buyers in India in a dramatic turn of market-related developments, and this month’s total FPI inflows are likely to be an all-time high, according to analysts on Sunday.

The trend of FPI buying, which began early this month, gathered momentum with FPIs turning big buyers every day.

This month (till November 13), FPIs bought equity worth a massive Rs 79,301 crore. This trend is likely to continue and this month’s total FPI inflows are likely to be an all-time high.

“The victory of the Democrats in the US Congressional elections led to a sell-off in AI stocks since the Democrats are in favour of regulating AI and AI spending. Money rotated to non-AI trades where India’s prospects are good,” Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

The Q2 results indicate strong recovery in corporate earnings. Around 15 per cent earnings growth for Nifty 50 looks achievable for FY27. This is providing the fundamental support to the FPI inflows, said the analyst.

Moreover, the valuations in India had become fair and in many pockets of large-caps, attractive. FPIs used the opportunity to accumulate fairly-valued large-caps. The stability in the rupee also imparted confidence to FPIs.

Sustained FPI inflows that amounted to Rs 33,340 crore last week helped Indian equity benchmarks end the week higher. FIIs extended their buying streak to three consecutive weeks, following a 10-week selling phase.

Domestic institutional investors (DIIs), however, were net sellers for a second straight week, offloading equities worth Rs 24,190 crore and remaining sellers in all four trading sessions.

Foreign institutional investors made substantial net inflows of approximately Rs 45,960 crore in the previous week, marking a significant turnaround from the persistent selling trend.

An important factor that contributed to the smart rally in the Nifty is the short-covering in frontline large-caps, particularly in some leading banking names.

“Sustained selling/profit booking by DIIs will restrain the rally, going forward. But the sudden and dramatic change in the FPI stance towards India suggests that the market will remain resilient,” said analysts.

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