FII selling in India moderates amid steady improvement in foreign investors' sentiment
Mumbai, Aug 2
The trend in monthly foreign institutional investor net flows highlights gradual improvement, with net outflows declining from Rs 122,540 crore in March to Rs 70,140 crore in April, Rs 55,960 crore in May, Rs 49,030 crore in June and just Rs 5,780 crore in July, according to provisional exchange data.
FII selling has moderated significantly over past months, indicating a steady improvement in overseas investor sentiment, said analysts.
"After witnessing record-high outflows earlier in 2026, the pace of selling has eased considerably, with July recording the lowest monthly outflow of the year," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.
The final week of July marked a notable shift in FII activity. Overseas investors turned net buyers in multiple trading sessions, resulting in net purchases of Rs 5,950 crore for the week, based on provisional exchange data.
This reversal suggests improving confidence in Indian equities amid supportive domestic fundamentals, said the analyst.
Meanwhile, domestic institutional investors (DIIs) continue to remain net buyers in all the 7 months in 2026.
For the month of July, DIIs purchased Rs 35,100 crore while in the previous week, DIIs were net buyer by Rs 5,390 crore.
According to Vinit Bolinjkar, Head of Research, Ventura, Indian equity markets wrapped up the week on a firm footing, with the benchmark Nifty 50 closing at 24,366.
Domestic sentiment has been bolstered by a decisive turnaround in foreign capital flows.
While the USD/INR hovering near 95.42 and Brent crude consolidating around $87 per barrel, demand cautious vigilance on the imported inflation front, strong domestic institutional buying and robust bluechip buying have established a solid market floor, said the analyst.
The near-term outlook remains constructively bullish as investors price in healthy earnings momentum and strengthening macro-liquidity, said market watchers.
In August, investors will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions.
— IANS
Reader Comments
The 95.42 USD/INR level is concerning though. Imported inflation can hurt our economy if crude keeps climbing. $87 per barrel is no joke. But I appreciate that our DIIs are stepping up and providing stability. Smart investors should watch the geopolitical situation closely before making big moves.
Nifty at 24,366 and FIIs turning net buyers in the last week—this is exactly what retail investors wanted to see. The fundamentals of our market are strong, and it's good that foreign money is recognizing that again. DIIs deserve credit for holding the fort when FIIs were running away.
I wish the media would also highlight how much our domestic institutions have grown over the years. We're not as dependent on FIIs as we used to be. The moderation in selling is good news, but let's not forget that our own investors are driving this market forward. 💪
Sensible analysis. But I'm a bit cautious—$87 Brent and US-Iran tensions could reverse this trend quickly. The market is up but these geopolitical risks are unpredictable. My advice: stay invested but keep some cash aside for buying dips. Better safe than sorry, yaar.
It's heartening to see the improvement from March's massive outflow to July's minimal one. The optimistic outlook about earnings momentum and macro-liquidity gives me confidence. However, I'd like more focus on why FIIs left in the first place—we need long-term solutions, not just short-term fixes.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.