FPIs Invest Rs 19,675 Crore in Early February Following Extended Selling Period
Foreign Portfolio Investors (FPIs) have made a notable comeback in early February, injecting ₹19,675 crore into Indian equities during the first half of the month. This surge in investment follows three months of substantial outflows, driven by optimism surrounding the US-India trade deal and a reduction in global economic uncertainties. Despite this positive trend, FPIs have experienced significant net withdrawals this year, raising questions about the overall sentiment among foreign investors.
Recent Investment Trends
In the first two weeks of February, FPIs reversed their previous trend of selling, contributing ₹19,675 crore to the Indian equity market. This influx comes after a challenging period where FPIs withdrew ₹35,962 crore in January, ₹22,611 crore in December, and ₹3,765 crore in November. The data indicates a stark contrast to the recent buying spree, highlighting the volatility in foreign investment patterns. The recent inflows are seen as a response to improved market conditions, particularly the anticipated benefits from the US-India trade agreement, which has sparked renewed interest among foreign investors.
Challenges in 2025
Despite the recent positive inflow, the overall sentiment among foreign investors in 2025 remains subdued. FPIs have pulled out a staggering net amount of ₹1.66 lakh crore (approximately $18.9 billion) from Indian equities this year, marking one of the most challenging periods for foreign fund flows. Factors contributing to this trend include fluctuating currency values, ongoing global trade tensions, and concerns regarding potential tariffs from the United States. These elements have created a cautious environment for foreign investors, despite the recent uptick in investment.
Factors Supporting Investment
Several factors have contributed to the recent resurgence in FPI investments. According to Himanshu Srivastava, principal manager of research at Morningstar Investment Research India, easing global macroeconomic concerns, particularly softer inflation data from the US, have played a crucial role in boosting investor sentiment. This positive shift has improved risk appetite for emerging markets like India. Additionally, stable domestic macroeconomic indicators, consistent inflation rates, and corporate earnings that align with expectations have further reinforced confidence in India’s growth trajectory. Analysts also point to the supportive measures outlined in the Union Budget 2026 and the easing of global trade uncertainties as key drivers of the recent inflows.
Ongoing Selling Pressure
Despite the encouraging headline figures, FPIs have continued to exhibit selling behavior on a month-to-date basis. Data shows that while FPIs were net buyers in seven out of eleven trading sessions in February up to the 13th, they still recorded a net sale of equities worth ₹1,374 crore during the same period. This trend was significantly impacted by a sharp sell-off of ₹7,395 crore on February 13, coinciding with a decline of 336 points in the Nifty 50 index. The week also saw considerable selling pressure in the IT sector, attributed to the so-called “Anthropic shock,” leading to an 8.2 percent drop in the IT index. This ongoing volatility underscores the complex dynamics at play in the Indian equity market, as FPIs navigate both opportunities and challenges.
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