After continuously withdrawing money from Indian stock markets for the last 3 months, foreign portfolio investors (FPIs) became buyers in October. He has infused a net Rs 6,480 crore into shares so far. The main reason for this is strong macroeconomic factors. According to depository data, earlier FPIs had withdrawn Rs 23,885 crore from the stock markets in September, Rs 34,990 crore in August and Rs 17,700 crore in July.
FPI has withdrawn approximately Rs 1.5 lakh crore from shares so far in 2025. Meanwhile in the bond market, FPIs have invested around Rs 5,332 crore under the general limit and Rs 214 crore through the voluntary retention route this month till October 17.
What are the reasons why FPI’s confidence increased?
Fresh FPI investment in stock markets in October signals a major shift in sentiment and reflects renewed confidence among global investors in Indian markets. There are several major factors behind this reversal. According to news agency PTI, Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, says that India’s macro backdrop remains strong compared to other emerging markets. Stable growth, inflation within manageable range and resilient domestic demand have boosted FPI confidence.
Further said that the global liquidity situation is gradually improving, a cut in rates in the US or at least a pause is expected. As risk appetite returns, investment in high-return emerging markets is increasing. Moreover, valuations of Indian stocks which were earlier under pressure, have now become more attractive. Due to this, the interest in buying in the fall is increasing again.
Reduction in tension regarding trade between America and India is also a reason
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, says that the main reason for this change in strategy of FPIs is the reduction in valuation gap between India and other markets. According to Wakarjaved Khan, Senior Fundamental Analyst of Angel One, the new investment can also be said to be inspired by the reduction in tension regarding trade between America and India. The selling pressure seen in early 2025 has made the valuation multiples of Indian stocks more attractive compared to global peers. Experts believe that future developments regarding trade and the current quarter results in the coming weeks will play an important role in deciding the stance of FPI.