FIIs Turn Net Buyers in Equities, Invest $899 Million Over Five Sessions

Foreign institutional investors (FIIs) have bought nearly $899 million worth of Indian equities over the last five trading sessions, extending their renewed interest in domestic financial assets after stepping up purchases in the debt market earlier this month.

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The recent buying has coincided with gains in benchmark indices. The Sensex and Nifty have risen nearly 3% so far in June, while foreign investors have also added around $2.68 billion to Indian debt markets since June 4.

Debt Market Inflows Gain Momentum

According to NSDL data, overseas investors purchased only $1.23 billion worth of Indian bonds during the January-May period. Activity accelerated sharply in June following tax-related relief measures and liquidity initiatives announced by the Reserve Bank of India.

In contrast, foreign investors had remained heavy sellers in equities through most of the year. NSDL data showed cumulative equity outflows of nearly $30 billion since the beginning of 2026. The recent rally in stocks and bonds is a reflection of the improved sentiment among investors for Indian assets.

Cooling Oil Prices Support Outlook

Market participants have linked the turnaround to a combination of domestic and global developments. Progress in negotiations between the U.S. and Iran has helped ease crude oil prices, reducing concerns over imported inflation and supporting India’s macroeconomic outlook.

Speaking to Moneycontrol, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said valuations across several pockets of the market have become more reasonable following corrections in prices and time. He added that the latest FTSE index rebalancing, which included newly listed companies, also resulted in additional passive inflows.

Macro Conditions Improve Investor Confidence

Analysts said stable economic growth, moderating inflation and ongoing fiscal consolidation efforts have strengthened India’s appeal among global investors. Expectations of monetary easing by major central banks have also improved sentiment toward emerging markets.

India’s inclusion in global bond indices has further aided foreign participation, as investors often raise allocations across asset classes when confidence in macroeconomic fundamentals improves.

Nirav Karkera, Head of Research at W by Groww, told Moneycontrol that portfolio rebalancing at the global level has also contributed to the shift. He noted that after strong returns from artificial intelligence-related themes in markets such as the U.S., South Korea and Taiwan, investors are increasingly looking at economies with long-term growth opportunities and infrastructure spending potential.

Banking, capital goods, infrastructure and consumption-related sectors have continued to report healthy earnings growth. Strong systematic investment plan inflows and support from domestic institutional investors have also helped cushion volatility, while foreign investors are expected to remain focused on earnings trends and macroeconomic stability when evaluating future allocations.