FIIs turn net buyers after 10 weeks, pump ₹6,305 crore into Indian equities
Synopsis
After 10 straight weeks of selling, foreign institutional investors flipped to net buyers of Indian equities, injecting ₹6,305 crore in a single week. The Fed's rate pause was the trigger, but with Brent crude above $110 and the US midterm elections looming, the sustainability of this reversal is far from settled — and Bernstein has already trimmed its Nifty target to 25,000.
Key Takeaways
FIIs turned net buyers after a 10-week selling streak, purchasing ₹6,305 crore in Indian equities during the week ending 31 October 2026 .
Nifty 50 gained 2% on the week to close at 23,053.10 ; Nifty Smallcap 100 surged 4% , outperforming benchmarks.
DIIs remained net buyers for an 11th consecutive week , though purchases slowed to ₹3,110 crore from ₹10,942 crore the week prior.
Month-to-date FII net selling stands at ₹45,162 crore ; DII net purchases at ₹62,220 crore .
Brokerage Bernstein cut its Nifty 50 year-end target to 25,000 from 26,000 , citing LTCG reduction alone as insufficient to sustain FII inflows.
Key risks ahead: US midterm elections , Brent crude above $110 , and ongoing geopolitical conflicts.
Foreign institutional investors (FIIs) turned net buyers of Indian equities during the week ending 31 October 2026, snapping a 10-week selling streak with net purchases of ₹6,305 crore. The reversal, supported by improving global risk sentiment after the US Federal Reserve held interest rates steady, helped benchmark indices stage a sharp weekly rebound.
Market Recovery at a Glance
The Nifty 50 advanced 2% during the week to close at 23,053.10, touching an intraweek high of 23,118. The Bank Nifty rose 0.7%, while broader markets outperformed the benchmarks — the Nifty Midcap 100 climbed 2.7% and the Nifty Smallcap 100 surged 4%, recovering a meaningful portion of the previous week's losses. India's benchmark indices recouped most of the prior week's decline, though elevated Brent crude prices above $110 a barrel continued to weigh on the macroeconomic outlook.
FII Flows: The Turning Point
FIIs were net buyers in three of the last five trading sessions, marking a tentative but notable shift after weeks of sustained outflows. Month-to-date, FII net selling has narrowed to ₹45,162 crore, a figure analysts are watching closely for further compression. The Fed's decision to leave rates unchanged appears to have been the primary catalyst, easing pressure on emerging market currencies and equity valuations.
DIIs Steady But Slow Down
Domestic institutional investors (DIIs) extended their net buying streak to an 11th consecutive week, though the pace slowed sharply — purchases fell to ₹3,110 crore from ₹10,942 crore in the previous week as fund managers booked profits into the rally. Month-to-date DII net purchases stood at ₹62,220 crore, reflecting the consistent domestic support that has cushioned Indian markets through the recent FII-driven volatility.
What Analysts Are Watching
Analysts noted that the FII flow reversal is an encouraging signal, but cautioned that elevated crude prices and global event risks could temper the momentum. Market participants are closely tracking the outcome of the US midterm elections in the coming week, along with movements in Brent crude, developments in the US-Iran and Russia-Ukraine conflicts, and ongoing quarterly earnings announcements.
Notably, a recent report from brokerage Bernstein revised its Nifty 50 target to 25,000 by December 2026, down from a prior estimate of 26,000. The report argued that a reduction in long-term capital gains (LTCG) tax alone is insufficient to trigger sustained FII inflows into Indian equities.
The Road Ahead
Whether this week's FII turnaround marks the start of a sustained re-entry or merely a tactical positioning shift will likely become clearer as global macro signals crystallise. With crude elevated, geopolitical tensions unresolved, and the US election outcome pending, the recovery's durability remains contingent on external factors largely outside India's control.
Point of View
Not a trend. The Fed pause gave markets a breather, but the underlying pressures — crude above $110, unresolved geopolitical flashpoints, and a US election with unpredictable market implications — have not gone away. Bernstein's downward revision of the Nifty target to 25,000 is a telling signal: even the optimists are hedging. The more structurally important number is the DII slowdown; domestic fund managers reducing purchases into a rally typically indicates they see limited upside at current levels. If FII flows reverse again on the back of a strong US dollar or crude spike, the domestic cushion may prove thinner than recent weeks suggest.
NationPress
31 Oct 2026
Frequently Asked Questions
Why did FIIs turn net buyers of Indian equities after 10 weeks?
FIIs turned net buyers primarily because the US Federal Reserve left interest rates unchanged, easing pressure on emerging market assets and improving global risk sentiment. The shift saw FIIs net purchase ₹6,305 crore in Indian equities during the week ending 31 October 2026.
How much did the Nifty 50 gain this week?
The Nifty 50 gained 2% during the week to close at 23,053.10, touching an intraweek high of 23,118. Broader markets outperformed, with the Nifty Smallcap 100 rising 4% and the Nifty Midcap 100 advancing 2.7%.
What is Bernstein's revised Nifty 50 target?
Brokerage Bernstein revised its Nifty 50 target to 25,000 by December 2026, down from a previous estimate of 26,000. The firm noted that a reduction in long-term capital gains tax alone is insufficient to trigger sustained FII inflows into Indian markets.
Are domestic institutional investors still buying?
Yes, DIIs remained net buyers for an 11th consecutive week, though purchases slowed significantly to ₹3,110 crore from ₹10,942 crore the previous week, as fund managers booked profits into the market rally.
What are the key risks that could reverse this market recovery?
Analysts point to several risks: Brent crude prices remaining above $110 a barrel, the outcome of the US midterm elections, ongoing US-Iran and Russia-Ukraine geopolitical tensions, and quarterly corporate earnings results. Any adverse development on these fronts could dampen the nascent FII buying momentum.
