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After a prolonged period of withdrawals, foreign portfolio investors (FPIs) have shifted gears, emerging as net buyers in October with Rs 14,610 crore infused into Indian markets. This positive turn comes on the back of resilient corporate earnings, a 25 bps rate cut by the US Federal Reserve, and optimism surrounding upcoming US-India trade discussions. This reversal is especially significant after three consecutive months of heavy outflows, which saw FPIs pull Rs 23,885 crore in September, Rs 34,990 crore in August, and Rs 17,700 crore in July, according to depository data. The inflow in October signals renewed confidence among global investors in India’s growth story. Drivers Of Renewed FPI Confidence Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India, explained that the rebound in FPI activity was fueled by “improved risk sentiment and attractive valuations, following the recent correction and resilient corporate earnings across key sectors.” He further noted that easing inflation, expectations of a softer interest rate cycle, and supportive domestic reforms such as GST rationalisation have strengthened investor confidence. Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, added, “The latest inflows were supported by companies posting better Q2 FY26 results, the 25 bps rate cut by the US Fed, and optimism around US-India trade talks materialising soon.” Outlook For FPIs And Market Stability Looking forward, Morningstar’s Srivastava emphasised that the sustainability of this trend depends on stable macroeconomic conditions, a benign global environment, and consistent corporate earnings in upcoming quarters. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “There are clear signs of earnings recovery now. If brisk demand conditions are sustained, earnings will improve, which in turn will make valuations fair. In such a scenario, FPIs are likely to remain buyers.” Khan also indicated that FPI inflows could continue in November as previous outflows, totalling over Rs 77,000 crore between July and September, were largely driven by global headwinds. With international pressures easing and progress expected on US-India trade talks, market sentiment appears poised for further improvement. Despite the positive October performance, FPIs have still withdrawn around Rs 1.4 trillion so far in 2025. In the debt segment, FPIs invested Rs 3,507 crore under the general limit while withdrawing Rs 427 crore through the voluntary retention route during the month. Get Latest News live on Times Now along with Breaking News and Top Headlines from Business, Companies and around the world.
