Foreign institutional investors reversed course in February after several months of sustained selling. Net inflows into Indian equities stood at about $2.44 billion during the month.

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Secondary markets accounted for the bulk of the buying. FIIs purchased nearly $2.14 billion worth of shares in the secondary market. Primary market investments amounted to about $299 million.

This marked the highest monthly FII inflow since September 2024. In that month, total inflows had reached close to $5.95 billion.

Primary And Secondary Market Trends

Primary markets have seen consistent FII participation since October 2023. In contrast, secondary market activity had remained largely negative for several months.

February marked the first month of net secondary market buying since July 2025. FIIs had briefly turned marginal buyers in October 2025. However, selling resumed thereafter and persisted through January 2026.

Between July 2025 and January 2026, cumulative secondary market outflows stood at around $20 billion. Over the same period, primary markets attracted inflows of about $6.41 billion.

Longer-Term Selling Context

The February inflows follow a prolonged phase of foreign selling. Between January 2024 and December 2025, FIIs sold roughly $46.1 billion worth of equities in secondary markets.

This period of selling significantly reduced foreign portfolio exposure to Indian equities. The extended outflows coincided with volatility across global equity markets.

Market Performance During February

Equity indices showed mixed performance during the month. The Sensex and Nifty traded largely flat during February.

Broader markets outperformed benchmarks. The BSE MidCap 150 Index gained around 2%. The SmallCap 250 Index rose about 1.4%.

Despite the overall net buying, FIIs sold more than $1.21 billion worth of IT stocks during the first half of the month, according to data from National Securities Depository Limited.

Monthly Flow Pattern

Data shows alternating phases of inflows and outflows over the past two years. Several months in 2024 and 2025 recorded large secondary market withdrawals.

February 2026 stands out as a reversal within this pattern. The magnitude of inflows exceeded those seen in most months since late 2024.

Closing Note

The return of net FII buying in February marks a shift from recent months of consistent outflows. Secondary market participation drove the inflows, supported by continued primary market investment.

The February figures represent the strongest monthly FII inflow since September 2024. Foreign investor activity remains a key variable influencing equity market liquidity and participation levels.