Foreign portfolio investors (FPIs) have poured a net ₹45,970 crore into Indian equities in November 2026 so far, as a sharp global AI sell-off redirected capital toward India — widely perceived as a non-AI trade and therefore insulated from the correction rattling AI-heavy markets. The buying spree has propelled the Nifty 50 up a spectacular 8.6% across five consecutive sessions, closing the week at 25,030.35.

What triggered the AI sell-off

The global rout in AI-linked stocks originated in the United States, where fears over runaway data-centre spending began to unsettle investors. According to market participants, the Democrats — who won both chambers of Congress — are opposed to what they describe as indiscriminate data-centre expansion and are expected to push for regulatory guardrails on artificial intelligence. The sell-off then rippled through other AI-intensive markets, including South Korea, Taiwan, and Japan, prompting a rotation of capital into markets less exposed to the theme.

India benefits as a non-AI trade

India's equity market, which carries relatively modest direct exposure to global AI infrastructure spending, emerged as a primary beneficiary of that rotation. Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, attributed the surge to a confluence of factors. 'Furthermore, the impressive earnings growth in India and the attractive large-cap valuations, made India a favoured investment destination,' he said.

FPIs concentrated their buying in index heavyweights across financials, IT, automobiles, and telecom. The aggressive inflows triggered a significant short squeeze, amplifying the market's upward move.

Market performance: Nifty, Bank Nifty and broader indices

The Nifty 50 gained 8.6% over the week, closing at a high of 25,030.35. The Bank Nifty posted an equally strong showing, rising 8%. Broader markets, however, relatively underperformed: the Nifty Midcap 100 closed 5.8% higher while the Nifty Smallcap 100 added 2.8% — suggesting the rally was primarily large-cap driven.

Notably, last week also witnessed a complete reversal of institutional roles. Domestic institutional investors (DIIs) turned net sellers on all five sessions, while FPIs turned aggressive buyers — a sharp departure from the trend that had dominated much of the year.

Risks and what to watch

Analysts caution that the sustainability of foreign inflows remains the critical variable in the weeks ahead. With heavy domestic profit-booking leaving the rally heavily reliant on continued FPI support, any reversal in sentiment could expose the market to sharp corrections. Market participants are closely monitoring Brent crude prices and developments surrounding US-Iran tensions, both of which could affect risk appetite and emerging-market flows. The underlying question — whether India's current appeal is a durable re-rating or a temporary beneficiary of a risk-rotation trade — remains open.