FPIs pour Rs 16,621 cr into Indian equities in first half of August

Foreign investors continued their buying spree in Indian equities, investing Rs 16,621 crore in the first fortnight of August, as improving relative valuations, resilient corporate earnings and expectations of softer US interest rates boosted sentiment.

The inflow follows a Rs 20,200-crore investment in July, marking a sharp turnaround after four consecutive months of heavy selling by Foreign Portfolio Investors (FPIs).

FPIs had withdrawn Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April and a massive Rs 1.17 lakh crore in March. Prior to this selling streak, they had invested Rs 22,615 crore in February, according to CDSL data.

Despite the recent buying, foreign investors have remained net sellers in Indian equities in 2026, withdrawing around Rs 2.4 lakh crore so far, already exceeding the Rs 1.66 lakh crore outflow recorded during the entire 2025.

Market experts attributed the recent reversal to a combination of factors, including attractive valuations relative to other markets, steady corporate earnings, expectations of US rate cuts, softer crude prices and lower currency volatility.

"The key drivers are improving relative valuations, resilient corporate earnings, expectations of softer US rates, lower currency volatility and some diversification away from crowded Korea-Taiwan AI trades. AI became a magnet of all capital across the world," said Manish Bhandari, CEO and Portfolio Manager, Vallum Capital.

Vedant Gupte, Co-Founder and CEO of investment platform Trackk, said the August inflows suggest that the earlier selling was more a function of global macro factors than concerns over India.

"Expectations of US rate cuts, softer crude and a rupee that has stopped misbehaving have removed the three reasons foreign investors had to stay away," Gupte said.

According to him, FPI buying is also becoming more selective, with investors showing greater interest in sectors linked to domestic consumption.

"Consumer durables and healthcare are attracting interest. Foreign investors are underwriting the Indian household, not the Indian invoice," he said.

July's sectoral data showed strong buying in Consumer Services, Healthcare, Consumer Durables, Metals & Mining and IT, although several other sectors witnessed net selling.

Further FPI flows, however, are likely to remain sensitive to global cues, particularly US Treasury yields, the dollar index, crude oil prices and corporate earnings upgrades.

In the coming week, investors will closely track crude oil prices and developments around the ongoing US-Iran geopolitical tensions, said Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking.

Foreign investor interest has also extended to the debt market. FPIs invested Rs 972 crore in debt through the Fully Accessible Route (FAR) and another Rs 69 crore through the general route during the period under review.