Have Foreign Investors Turned Buyers in Indian Markets This Month?
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Synopsis
Foreign portfolio investors are shifting gears in the Indian market, reducing their selling and turning into buyers. This trend, fueled by positive economic indicators and geopolitical developments, could signal a promising outlook for investors. Discover how these changes impact the Indian economy moving forward.
Key Takeaways
- Foreign investors have slowed down selling in October.
- Recent FPI purchases amounted to Rs 3,289 crore.
- Improved economic indicators are driving investor confidence.
- Geopolitical developments may influence future market trends.
- Market analysts expect earnings growth in FY27.
New Delhi, Oct 12 (NationPress) The pace of foreign portfolio investor (FPI) selling in the Indian markets has notably decreased this October, according to analysts on Sunday.
This change in FPI trading strategy is noteworthy and is driven by two main factors.
Firstly, the valuation differentials between India and other markets, which were previously elevated, have significantly narrowed in recent weeks due to the rally in other markets and a period of consolidation in India.
“Secondly, market analysts have revised the growth and earnings outlook for India upwards. The recent GST cuts and the prevailing low-interest rate environment are expected to enhance India Inc’s earnings in FY27, which the market will soon begin to factor in,” stated Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.
In the last four trading sessions of the week ending October 10, foreign investors shifted to buying in the cash market.
The total cash market purchases during these sessions amounted to Rs 3,289 crore.
However, the global market sentiment has turned negative again due to a resurgence in the US-China trade war, following US President Donald Trump’s threat to impose a 100% tariff on imports from China and to restrict several critical US exports to China.
Future FPI flows will depend on how this renewed trade conflict evolves, as per analysts.
Siddhartha Khemka, Head of Research at Wealth Management, Motilal Oswal Financial Services Ltd, reported that the Nifty50 index increased by 104 points, closing at 25,285 last Friday, buoyed by improving global sentiment and easing geopolitical tensions after Israel and Hamas made progress on a ceasefire plan, along with indications of progress in a potential India–US trade deal.
“The renewed FPI buying also lifted sentiment. Moreover, India and the UK have announced several collaborations across various sectors, including education, critical minerals, climate change, and defense,” he added.
With the narrowing valuation differential and anticipated improvement in Indian earnings for FY27, foreign portfolio investors are expected to reduce their selling activities moving forward.
In September, sustained FPI selling persisted, with total sales through exchanges reaching Rs 27,163 crore. Nonetheless, in line with the long-term trend of buying in the primary market, they purchased equity worth Rs 3,278 crore in September.
On the macroeconomic front, investors will be keenly observing India’s retail inflation figures for September, which are set to be released on Monday.
Point of View
The recent uptick in foreign investments reflects a strategic shift in market sentiment. With the potential for growth in the Indian economy and improved valuations, this could indicate a robust future for foreign investments. It's crucial that we continue to monitor these developments closely as they unfold.
NationPress
12/10/2025
Frequently Asked Questions
What factors influenced foreign investors to buy in India?
Foreign investors shifted to buying due to narrowing valuation differentials and improved growth prospects in the Indian market.
How much did foreign investors buy in the cash market recently?
Foreign investors purchased equity worth Rs 3,289 crore in the cash market during the last four trading sessions.
What impact could the US-China trade war have on FPI flows?
The ongoing US-China trade war may affect future FPI flows, depending on how the situation evolves.
