Are Foreign Investors Continuing to Buy in Indian Markets?
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Synopsis
Mumbai, Oct 26 (NationPress) Foreign investors are actively re-engaging with the Indian markets this October, with analysts predicting a sustained trend. Discover how the primary market is contributing to this resurgence and what factors could further elevate investor confidence.
Key Takeaways
- FIIs have shifted to buying in the Indian market this October.
- Investments through the primary market reached Rs 10,692 crore.
- Domestic institutional investors continue to support the market.
- Positive sentiments may be bolstered by the India-US trade deal.
- Profit-booking could limit sustained rallies in the market.
Mumbai, Oct 26 (NationPress) Foreign investors have made a significant return to the Indian markets this month, with the primary market serving as a consistent source of profit, a trend that analysts predict will persist. The ongoing decrease in foreign institutional investors (FII) selling, which began in early October, continues unabated.
Throughout many days in October, FIIs have shifted to being buyers. Up to October 25, total FII selling recorded through exchanges was a minimal Rs 3,363 crore, according to NSDL data.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, noted, “The long-term trend of FIIs consistently investing in the primary market has continued into October, with total investments reaching Rs 10,692 crore (up to October 25). This method of investing has proven to be a reliable source of profit for FIIs, indicating that this trend is likely to carry on.”
On Thursday, FIIs became net sellers, offloading Rs 1,166 crore after a streak of five days of purchasing, reflecting some profit-booking activity. Meanwhile, domestic institutional investors (DIIs) have remained supportive, showing net inflows of Rs 3,893 crore.
“While FII inflows and positive management commentary could help maintain market momentum, occasional profit booking should not be overlooked. Furthermore, advancements in the India-US trade deal could further boost investor sentiments,” stated Siddhartha Khemka, Head of Research at Wealth Management, Motilal Oswal Financial Services Ltd.
Analysts have highlighted several critical factors that could lead to FIIs increasing their buying in India.
Firstly, the valuation gap between India and other markets has narrowed, discouraging further FII selling in favor of other markets.
Secondly, earnings growth in India is gradually improving and is expected to accelerate in FY27.
“Thirdly, the Diwali sales this year have reached record highs across various goods, showcasing a resilient economy and strong consumption. Fourthly, hints of a trade agreement between India and the US could significantly enhance market sentiments,” explained Vijayakumar.
These elements have the potential to incentivize FIIs to become buyers in the Indian market. However, analysts caution that at elevated levels, they may revert to selling, limiting the potential for a sustained market rally.
Point of View
It's crucial to recognize the dynamic shifts in foreign investment within India. The steady influx of foreign institutional investors not only reflects confidence in the Indian economy but also underscores the importance of global financial partnerships. By maintaining a focus on sustainable growth, we can ensure that these positive trends continue to benefit the broader economic landscape.
NationPress
26/10/2025
Frequently Asked Questions
What is the current trend of foreign investment in India?
Foreign investors are showing a positive trend with increased buying activity in the Indian markets, particularly in the primary market.
How much did FIIs invest in October?
As of October 25, foreign institutional investors have invested a total of Rs 10,692 crore in the primary market.
What factors are influencing FIIs' return to India?
Factors include narrowing valuation differential, improving earnings growth, record Diwali sales, and potential trade agreements with the US.
Are domestic investors also participating?
Yes, domestic institutional investors (DIIs) have shown strong support with net inflows of Rs 3,893 crore.
What is the outlook for foreign investment in India?
The outlook remains optimistic, although analysts caution that profit-booking at higher levels could limit sustained market rallies.
