Mumbai, March 1 (IANS) Foreign portfolio investors (FPIs) made a strong comeback to Indian equities in February, investing Rs 22,615 crore.
This marks the highest monthly inflow in the past 17 months and comes after three straight months of heavy selling.
The fresh buying was supported by positive developments such as the interim India-US trade deal, correction in domestic market valuations and strong third-quarter corporate earnings. The renewed confidence helped reverse the recent trend of outflows.
According to data from the depositories, FPIs had pulled out Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November.
Despite February’s inflows, foreign investors have withdrawn a net Rs 1.66 trillion (about $18.9 billion) from Indian equities so far in 2025, making it one of the toughest periods for foreign flows in recent years.
The earlier outflows were driven by volatile currency movements, global trade tensions, concerns over possible US tariffs and high equity valuations.
February’s inflow is the highest since September 2024, when FPIs had invested Rs 57,724 crore in Indian markets.
Earlier, a report by Emkay Global Financial Services had said that foreign inflows into Indian equities were expected to bounce back once currency volatility stabilised.
The brokerage had described the weakness in the rupee as a temporary phase and maintained that the long-term outlook for Indian markets remains strong.
The report noted that domestic institutional investors (DIIs) have played a key role in maintaining market stability during periods of FPI selling.
It highlighted that DIIs now hold a higher share in Indian equities than FPIs and have acted as a buffer against market volatility.
According to the brokerage, the long-term trend of domestic savings moving towards equities remains intact.
It expects the share of equities in household savings to rise over the next decade, supported by steady domestic inflows.
The report also pointed out that despite a recent rise in gold’s share in household savings, there has been no major impact on incremental equity flows.
–IANS
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