After a period of substantial withdrawals, foreign portfolio investors have turned bullish on Indian equities in August, signalling a potential shift in overseas sentiment amid improving global and domestic economic signals.
Foreign portfolio investors have extended their return to Indian equities in August, adding to a rebound that began in July after four straight months of heavy selling. Deposit data cited in the lead report show that overseas funds bought more than ₹16,621 crore of Indian stocks in the first 15 days of August, following purchases of about ₹20,200 crore in July.
The buying marks a sharp shift from the first half of the year. Moneycontrol reported that FPIs had already withdrawn ₹2.25 lakh crore by the end of May, exceeding the ₹1.66 lakh crore they pulled out in all of 2025. LiveMint said the selling continued into June, with FPIs unloading ₹63,450 crore of Indian equities in the first half of that month, led by financial services and oil-and-gas shares.
Earlier this year, overseas investors were unsettled by a mix of weaker earnings, a softer rupee, higher crude prices and better opportunities in other markets. LiveMint also reported that by April the cumulative outflow had reached about ₹1.8 lakh crore, with global uncertainty and a rotation into artificial intelligence-linked stocks in the US, South Korea and Taiwan weighing on sentiment.
The tone has improved as investors have started to price in possible US rate cuts, while Indian valuations remain relatively attractive and first-quarter earnings have been firmer than expected, market specialists told the lead report. Falling crude prices have also helped sentiment. Even so, the main Indian benchmarks ended the previous week lower, with the Sensex down 490 points and the Nifty off 205 points, underlining how uneven the market backdrop remains.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
