Foreign Investors Return to Indian Markets, Pump ₹23,000 Crore into Equities in Five Sessions

What’s Driving the FII Resurgence?

The surge in foreign inflows has coincided with a seven-day winning streak for the Indian stock market, pushing both the Nifty 50 and Sensex out of correction territory. Several factors have contributed to this turnaround:

Easing valuations after the recent market correction.

A stronger rupee, making Indian assets more attractive.

Cooling inflation, boosting investor confidence.

Improved macroeconomic conditions supporting long-term growth.

On March 25 alone, FIIs purchased shares worth ₹19,066 crore while selling ₹13,694 crore, marking a net inflow of over ₹5,300 crore. Data from exchanges also indicates that 101 out of 220 stocks in the futures and options (F&O) segment saw short covering, further fueling the rally.

FII Trends and Market Outlook

Despite this recent surge, FIIs remain net sellers of ₹1.49 lakh crore in Indian equities for 2024. However, analysts suggest the tide may be turning.

Bay Capital, an India-focused investment firm, believes that attractive valuations could drive fresh inflows in the coming months.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the FII comeback has boosted confidence among retail investors, particularly in small and mid-cap stocks.

While some hedge funds have exited due to short-term strategies and reallocation to China and other emerging markets, improving market fundamentals and global interest could lead to stronger FII participation in the near future.

With foreign investors regaining confidence in India, the market may continue to witness robust inflows, further supporting its upward momentum.

Disclaimer: The views and investment tips expressed by experts are their own. Investors are advised to consult certified professionals before making financial decisions.