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Overseas portfolio traders (FPIs) injected Rs 22,615 crore into Indian equities, the very best month-to-month influx in 17 months, on the again of the India-US Interim Commerce Settlement, revised home market valuations and robust company earnings within the third quarter.
This buy comes after three consecutive months of heavy promoting. As per custodian information, FPIs withdrew Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November.
Total, FPIs have withdrawn a internet 1.66 billion rupees ($18.9 billion) from Indian equities in 2025, making it one of many worst durations for international capital inflows. The outflows had been triggered by unstable forex actions, international commerce tensions, issues about potential U.S. tariffs and hovering inventory costs.
As per the information, FPIs invested Rs 22,615 crore in February. This was the very best month-to-month influx since September 2024, when it invested Rs 57,724 crore.
Vinit Bolinjikar, head of analysis at Ventura, stated the inflows had been pushed by secondary market shopping for and signaled an outflow of exterior confidence from 2025 onwards.
Javed Khan, senior basic analyst at Angel One, stated three key catalysts supported the inflows. These embrace the India-US commerce settlement and amendments to India’s market valuation. Moreover, Q3 FY26 earnings elevated by 14.7%, suggesting confidence within the development story.
Varun Gupta, CEO of Develop Mutual Fund, echoed comparable views, saying the recent inflows had been because of improved earnings momentum, valuations easing from peak ranges and early indicators of easing commerce uncertainty as India signed a number of FTAs, together with these with the EU and UK.
Sector-wise, FPIs actively purchased monetary and capital items however continued to cut back their publicity to the IT sector. The sector noticed an outflow of Rs 10,956 crore because of issues over AI-driven disruption.
“FPIs had been closely offered into IT shares because of the antropic shock and continued weak spot within the sector. Nonetheless, they turned shopping for into monetary providers and capital items,” stated VK Vijayakumar, chief funding strategist at Geojit Investments.
Wanting forward, Khan stated he anticipated flows to stay constructive in March. Whereas This autumn earnings will decide whether or not 15% revenue development is achievable in FY27, stability within the rupee beneath 91 ₹/$1 offers consolation on earnings.
Mr. Vijayakumar stated FPIs are more likely to undertake a wait-and-see strategy earlier than rising publicity to rising markets. Nonetheless, enhancing GDP development prospects and wholesome company earnings outlook for FY27 bode effectively for medium-term capital flows.
In the meantime, the persevering with battle within the Center East is inflicting a risk-on mentality in monetary markets. He added that the affect on oil costs and forex fluctuations stays an vital topic to watch.
