Foreign Portfolio Investors (FPIs) Invest Record Rs 8,831 Crore in Indian Stock Market, Highest Single-Day Influx since March

Foreign Portfolio Investors (FPIs) Invest Record Rs 8,831 Crore in Indian Stock Market, Highest Single-Day Influx since March

In a change of pace for Foreign Portfolio Investors (FPIs), they've been plunging headfirst into Indian equities for three consecutive days as of Friday, scooping up a whopping Rs 8,831.1 crore worth of shares, the most significant single-day inflow since March 27, according to preliminary data from the National Stock Exchange (NSE) released on Saturday.

This buying spree signifies a growing confidence in Indian markets, even amidst broader global uncertainties. A day prior, FPIs had invested Rs 5,746.5 crore, bringing the total net inflow so far in May to a robust Rs 18,620 crore.

The impressive inflow in May stands in stark contrast to April, where overseas investors had net purchased just Rs 4,223 crore worth of equities, as per National Securities Depository Limited (NSDL) data. Local institutional investors also jumped back into the game on Friday, following a brief hiatus, snagging equities worth Rs 5,187.1 crore.

Despite the robust foreign inflows, the benchmark indices took a tumble on Friday due to some profit-taking in large-cap stocks. The Nifty slid 42.30 points or 0.17% to close at 25,019.80, while the Sensex dropped 200.15 points or 0.24% to settle at 82,330.59.

During the trading session, the Nifty dipped as low as 0.44% to 24,953.05 and the Sensex fell 0.47% to 82,146.95. However, for the week ending May 16, both indices recorded impressive gains - with the Nifty rising 4.21% and the Sensex surging 3.62%, marking their best weekly performance since October 2024.

Nandish Shah, Senior Derivatives and Technical Research Analyst at HDFC Securities, notes that "the Nifty is continuing to trade above its short-term moving averages, maintaining an upbeat trend. The next resistance is seen at 25,207, while support is placed around 24,800."

FPIs' renewed interest in Indian equities in May comes after a sluggish start to 2025. In the initial three months of the year, foreign investors were net sellers, unloading equities worth Rs 116,574 crores. However, they seem to have changed their game plan in April and May, turning into net buyers. This shift was likely influenced by easing geopolitical tensions, stabilizing macroeconomic conditions, and appealing global cues, as well as domestic resilience and regulatory reforms by the Securities and Exchange Board of India (SEBI).

Further factors contributing to this change include India's strong domestic fundamentals, such as controlled inflation and expected rate cuts by the Monetary Policy Committee, as well as the potential for a US-India trade agreement and a weakening US dollar relative to the Indian rupee. In May alone, FPIs have injected Rs 23,778 crore into Indian equities, marking a dramatic increase compared to their earlier outflows.

Business confidence among Foreign Portfolio Investors (FPIs) has grown substantially, as indicated by their increased investing in Indian equities. This surge in investing, totaling Rs 23,778 crore in May, is a far cry from their net sales of equities worth Rs 116,574 crores in the first quarter of 2025.

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