FIIs Return to Indian Markets, Pump Over ₹3,000 Crore in Seven Sessions

After months of consistent selling, foreign institutional investors (FIIs) have changed their strategy and are now net purchasers of Indian stocks. According to NSDL data, FIIs were net buyers in five of the seven trading sessions from October 7 to October 14, contributing more than ₹3,000 crore to the secondary market. They were considerably more active in the main market, contributing about ₹7,600 crore. According to preliminary NSE data, FIIs contributed an additional ₹162 crore on October 15, indicating a resurgence of interest in local stocks.

FIIs Turn Net Buyers After Months of Selling

This resurgence comes amid a steady uptrend in benchmark indices. Since the start of October, the Sensex and Nifty have climbed around 3%, while the BSE MidCap index rose 3.4% and the SmallCap index gained 1.7%. The sudden reversal has caught market observers by surprise. Some experts interpret this as a short-term rebound, while others link it to improving corporate earnings prospects and stabilising macroeconomic conditions.

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Earlier this year, from January to September 2025, FIIs sold over ₹2 lakh crore in the secondary market, despite supportive measures such as GST rate cuts, a significant repo rate reduction in June, and an upgrade of India’s sovereign rating by S&P. During this period, Indian equities lagged behind global peers, with the Sensex and Nifty rising modestly by 3%, while the MidCap and SmallCap indices declined 3% and 4%, respectively.

“The recent FII buying reflects better earnings visibility and improving economic parameters,” said Deven Choksey of DRChoksey FinServ. “With valuations around 20 times earnings, the Nifty is attractively priced after meaningful corrections from its highs, suggesting a stronger second half of the fiscal year.”

Market Sentiment Boosted by Trade Hopes and Earnings

Market sentiment is further supported by optimism over a potential India–U.S. trade deal amid escalating U.S.–China tensions. Expectations of a U.S. Federal Reserve interest rate cut later this month could also enhance liquidity flows into emerging markets, benefiting both commodities and equities.

Analysts note that India is an attractive long-term investment destination due to the country's weaker rupee, subdued domestic market performance, and anticipated double-digit profit growth for the Nifty50 in the second half of FY26. Within the next 30 to 60 days, investors are hoping for a favourable outcome on the India-U.S. trade pact, according to Sunny Agrawal of SBI Securities. It is unclear if these inflows will continue.

Still, some prudence is necessary. "While government stimulus and positive Q2 results have rekindled interest, heavy short positions in derivatives and intermittent selling suggest prudence," said Vinayak Magotra of Centricity WealthTech. Before a complete FII return can be announced, a consistent trend is required.

Conclusion

The latest FII inflows, which reflect increased confidence in corporate results, regulatory support, and favourable global conditions, could signal a turning point for Indian shares. Although there is a lot of hope, economists suggest keeping a tight eye on trends to ensure a long-term recovery.