Going ahead, global macros (declining dollar, slowing US and Chinese economy) and domestic macros (high GDP growth and declining inflation and interest rates) will facilitate increasing FPI inflow into the Indian equity, VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said.
Mumbai: Foreign investors continue to show confidence in the country’s equity market, infusing Rs 14,167 crore so far this month, largely driven by favourable global cues and robust domestic fundamentals.
Notably, this inflow has come despite the ongoing military tensions between India and Pakistan.
This positive momentum follows a net investment of Rs 4,223 crore in April, marking the first inflow after three months, data with the depositories showed.
Prior to this, foreign portfolio investors (FPIs) had pulled out Rs 3,973 crore in March, Rs 34,574 crore in February, and a substantial Rs 78,027 crore in January.
Going ahead, global macros (declining dollar, slowing US and Chinese economy) and domestic macros (high GDP growth and declining inflation and interest rates) will facilitate increasing FPI inflow into the Indian equity, VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said.
FPIs recorded a net inflow of Rs 4,220 crore in May, witnessing a decline from Rs 6,271 crore billion in March, according to the data compiled by IDBI Capital.
The FPIs inflow in financial services also dipped as in April, the sector attracted Rs 18,410 crore, compared to Rs 19,700 crore inflow in March.
Media & Telecommunication maintained its momentum with Rs 4,760 crore in inflows, reflecting sustained optimism around digital expansion and consumption.
Meanwhile, the fast-moving consumer goods (FMCG) sector staged a notable recovery, attracting Rs 2,920 crore in April after witnessing outflows in March.
Indian stock indices had seen upward movement since Trump’s decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception.
Several reports attribute the trend as there is an easing seen in the input costs, and rural demand has witnessed an improvement.
The IDBI Capital data suggests that the Consumer Services and Diversified sectors also received modest inflows of Rs 1,790 crore and Rs 1,760 crore, respectively. However, inflows into Diversified were lower than the previous month, suggesting selective investor interest within that segment.
Geopolitical tensions between India and Pakistan following the terrorist attack in Pahalgam on April 22, had weighed on investor of late. The investors will continue to keep an eye on the escalation of tensions between the two nations, as they bet in the financial markets.
On the downside, the IT & Services sector witnessed pressure due to the uncertainties globally and weakening tech spending by companies.
The sector saw steep outflows of Rs 15,410 are –more than double the Rs 7,400 crore outflow in March.
Healthcare also saw a modest investor sentiment with outflow reaching Rs 7.3 billion. The traditional sectors like Automobiles, Metals & Mining, and Real Estate remained under pressure.
In contrast, the Power & Utilities sector bucked the trend, with Rs 9200 crore in fresh investments.
Overall, April’s positive FPI inflows were driven by Financial Services, Media & Telecom, and FMCG, despite significant outflows in IT, Automobiles, and Metals & Mining.
However, debt inflows are likely to remain very low, he added.
According to the data with the depositories, Foreign Portfolio Investors made a net investment of Rs 14,167 crore in equities in this month (till May 9). The latest flow has helped narrow the outflow to Rs 98,184 crore in 2025 so far.
India’s equity markets witnessed a sharp resurgence in FPI activity in April, signalling a marked reversal from the outflow seen earlier this year. The momentum continued in May too.
This renewed momentum was underpinned by a blend of favourable global cues and robust domestic fundamentals that bolstered investor confidence, Himanshu Srivastava, Associate director – Manager Research, Morningstar Investment, said.
One of the key catalysts behind this trend has been the improving outlook for a potential US-India trade agreement. Additionally, the weakening of the US dollar, alongside a strengthening Indian rupee, enhanced the appeal of Indian assets to global investors, he said.
Furthermore, upbeat quarterly earnings from prominent Indian corporates added to the positive sentiment, he added.
“The hallmark of FPI investment in recent days has been the sustained buying by them. They bought equity through the exchanges consecutively for 16 trading days ended May 8 for a cumulative amount of Rs 48,533 crore. They sold for Rs 3,798 crore on May 9 when the India-Pak conflict got escalated,” Geojit Investments’ Vijayakumar said.
On the other hand, FPIs took out Rs 3,725 crore from debt general limit and invested Rs 1,160 crore in debt voluntary retention route during the period under review.