FPI buying in India set to continue as GDP, earnings outlook brightens
Synopsis
FPIs have already poured ₹12,920 crore into Indian equities in the first week of August alone, drawn by improving GDP and earnings prospects. But with US 10-year bond yields at 4.67 per cent, the window for sustained inflows is narrower than the headline numbers suggest — and the next move in global rates could be the deciding factor.
Key Takeaways
FPIs bought equities worth ₹12,920 crore through 7 August , split between exchanges ( ₹8,195 crore ) and the primary market ( ₹4,125 crore ).
Preferred sectors include automobiles , consumer durables , and healthcare , backed by strong Q1 FY27 earnings.
FPIs also active in mid-cap and small-cap stocks, signalling broad-based conviction.
US 10-year bond yield at 4.67 per cent poses a risk of diverting global capital away from India.
Sensex rose 0.52 per cent to 78,499.17 ; Nifty50 gained 0.77 per cent to 24,570.65 for the week ending 9 August .
Smallcap index outperformed, rising 2.61 per cent for the week.
Foreign portfolio investors (FPIs) are likely to sustain their buying streak in India through the near term, driven by improving GDP growth prospects and an encouraging corporate earnings trajectory, according to market analysts. The trend, which gathered momentum in July, has carried into August, with FPIs already net buyers in the equity market through the first week of the month.
FPI Inflows So Far in August
Through 7 August, FPIs purchased equities worth ₹12,920 crore, comprising ₹8,195 crore via stock exchanges and ₹4,125 crore through the primary market and other channels. FPIs also continued to channel funds into the debt market via the Debt General limit, signalling broad-based confidence in Indian assets.
Sectors Attracting FPI Attention
'An important trend in the FPI equity buying is their preference for sectors like automobiles, consumer durables and health care,' said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd. He noted that Q1 FY27 results from these sectors indicate healthy earnings growth, justifying the accumulation. FPIs have also been active in mid-cap and small-cap growth stocks across sectors, reflecting a willingness to move beyond large-cap names.
The Risk: High US Bond Yields
Despite the positive domestic backdrop, analysts caution that the rally may face headwinds. 'This is only to become a major trend since the US bond yields — the 10-year is at 4.67 per cent — are high. This has the potential to attract a lot of funds to the safe US bond markets,' Dr Vijayakumar noted. Elevated US yields historically divert capital away from emerging markets, including India, making the sustainability of FPI inflows contingent on global rate dynamics.
Weekly Market Performance
Indian equity benchmarks ended the week ending 9 August with modest gains despite heightened volatility. Investors navigated the rollout of the new Closing Auction Session (CAS) framework for F&O stocks, the Reserve Bank of India's (RBI) monetary policy decision, and lingering geopolitical uncertainties. The Sensex gained 0.52 per cent to close at 78,499.17, while the Nifty50 advanced 0.77 per cent to settle at 24,570.65. Broader markets outperformed, with the midcap and smallcap indices rising 0.81 per cent and 2.61 per cent respectively.
Outlook for the Week Ahead
The market enters the coming week with a balanced outlook, underpinned by resilient domestic fundamentals, a stable monetary policy stance, and an encouraging start to the earnings season. How US bond yields evolve and whether FPI momentum holds will be the key variables to watch.
Point of View
Consumer durables, and healthcare suggests investors are chasing earnings visibility rather than making a broad India macro bet — a distinction that matters when the cycle turns. More importantly, the 4.67 per cent US 10-year yield is not a background risk; it is an active competitor for the same global capital. India's equity premium over US risk-free rates has compressed, and any further yield spike in the US could flip FPIs from buyers to sellers faster than the domestic earnings story can compensate. The midcap and smallcap outperformance this week also warrants scrutiny — valuations in that segment have run well ahead of earnings in several pockets.
NationPress
9 Aug 2026
Frequently Asked Questions
How much have FPIs invested in Indian equities in August 2025?
FPIs purchased equities worth ₹12,920 crore through 7 August, with ₹8,195 crore flowing via stock exchanges and ₹4,125 crore through the primary market and other channels. The buying continues a trend that was pronounced in July.
Which sectors are FPIs buying in India?
FPIs have shown a clear preference for automobiles, consumer durables, and healthcare, according to analysts at Geojit Investments Ltd. Strong Q1 FY27 earnings in these sectors have justified the accumulation, and FPIs have also been active in mid-cap and small-cap growth stocks.
What is the key risk to continued FPI inflows into India?
The primary risk is elevated US bond yields, with the 10-year Treasury at 4.67 per cent. High US yields attract global capital to safer US fixed-income assets, potentially diverting funds away from emerging markets like India.
How did Indian markets perform in the week ending 9 August?
The Sensex gained 0.52 per cent to close at 78,499.17, while the Nifty50 advanced 0.77 per cent to 24,570.65. Broader markets outperformed, with the midcap index up 0.81 per cent and the smallcap index rising 2.61 per cent.
What is the Closing Auction Session (CAS) framework that markets navigated this week?
The Closing Auction Session (CAS) is a new framework rolled out for F&O stocks that changes how closing prices are determined. Its introduction added to market volatility this week, alongside the RBI monetary policy decision and geopolitical uncertainties.
