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Foreign Investors Return: How India's Market Rally Defies Global Trends

Foreign investors have made a strong comeback in Indian markets this October. They poured over Rs 10,000 crore into primary markets while reducing their selling activity significantly. Market experts believe this positive trend could continue with potential US trade deals boosting sentiment further. Strong Diwali sales and improving earnings growth are adding to the optimistic outlook for Indian markets.

Key Points: FII Buying Continues in Indian Markets Amid US Trade Deal Hopes

  • FIIs invested Rs 10,692 crore in primary markets during October
  • Domestic investors remained supportive with Rs 3,893 crore inflows
  • India-US trade deal progress could further uplift market sentiment
  • Diwali sales hit all-time high indicating robust consumption and resilient economy
2 min read

Foreign investors' buying continues in Indian markets, US deal to further boost sentiment

Foreign investors resume buying in Indian markets with Rs 10,692 crore primary market investment. Analysts see sustained momentum amid US trade deal optimism and strong Diwali sales.

"The long-term trend of FIIs continuously buying/investing through the primary market continued in October - Dr. VK Vijayakumar, Geojit Investments"

Mumbai, Oct 26

Foreign investors have returned to the Indian markets this month, and primary market has been a steady source of profit for them which is likely to continue, analysts said on Sunday.

The declining trend in foreign institutional investors (FII) selling, which started in early October, continues.

FIIs turned buyers too in many days of October. Total FII selling through exchanges (up to October 25) stood at a negligible Rs 3,363 crore, as per NSDL data.

“The long-term trend of FIIs continuously buying/investing through the primary market continued in October, too, with a total investment of Rs 10,692 crore (up to October 25). Investing through the primary market has been a steady source of profit for the FIIs and, therefore, this trend is likely to continue,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

On Thursday, FIIs turned net sellers to the tune of Rs 1,166 crore after five consecutive days of buying, reflecting profit-booking activity. Domestic institutional investors (DIIs) remained supportive with net inflows of Rs 3,893 crore.

“FII inflows and upbeat management commentaries could help sustain positive market momentum, though intermittent profit booking cannot be ruled out. Meanwhile, any progress on the India-US trade deal front, could further uplift investor sentiments,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Going forward, there are certain important factors that may lead to FIIs turning buyers in India, said analysts.

One, the valuation differential between India and other markets has declined discouraging further FII selling in India and moving monies to other markets.

Two, earnings growth in India is slowly picking up and will gather momentum in FY27.

“Three, the Diwali sales this year across large number of goods are an all-time high indicating a resilient economy and robust consumption. Four, there are indications of a trade deal between India and US which can substantially improve market sentiments,” said Vijayakumar.

These factors have the potential to turn FIIs into buyers in the Indian market. However, at higher levels they may again turn sellers thereby restricting a sustained rally in the market, analysts maintained.

—IANS

- IANS

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Reader Comments

R
Rohit P
Record Diwali sales + FII buying = perfect combination for market growth! 🚀 But we should be careful about profit booking at higher levels as mentioned in the article.
A
Arjun K
Good to see FIIs returning, but I'm more impressed by DIIs consistently supporting our markets. Shows domestic confidence in Indian economy. 💪
S
Sarah B
As someone who recently started investing, this analysis is very helpful. The primary market focus by FIIs is interesting - maybe retail investors should also look at IPOs more seriously.
V
Vikram M
While the news is positive, I hope our regulators keep a close watch. We've seen how foreign money can be volatile. Need sustainable growth, not just FII-driven rallies.
K
Kavya N
The Diwali sales data mentioned here is the real story! When Indian consumers spend, the world takes notice. Our domestic consumption story remains strong 💫

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