Foreign investor interest has also extended to the debt market.
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Foreign Portfolio Investors (FPIs) have accelerated buying in Indian equities this month, infusing ₹23,544 crore so far in August as improving quarterly earnings, a stable rupee and better market prospects lift sentiment.
The inflow comes after FPIs invested ₹20,200 crore in July, marking a sharp turnaround from four consecutive months of heavy selling and signalling renewed confidence in Indian equities.
FPIs had withdrawn ₹49,340 crore in June, ₹32,963 crore in May, ₹60,847 crore in April and a massive ₹1.17 lakh crore in March. Prior to this selling streak, they had invested ₹22,615 crore in February, according to CDSL data.
Despite the recent buying, foreign investors have remained net sellers in Indian equities in 2026, withdrawing around ₹2.3 lakh crore so far — exceeding the ₹1.66 lakh crore outflow registered during the entire 2025.
"The factors that are driving the FPIs back to the Indian market are: earnings growth revival as reflected in Q1 results, FPI withdrawal from the 'chip trade', rupee stability and the impressive growth prospects of companies in the broader market," V K Vijayakumar, Chief Investment Strategist, Geojit Investments, said.
FPIs are not buying attractively valued leading large banking or IT stocks; instead they are selectively buying mid-caps despite elevated valuations, he added.
In the coming week, investors will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions for further direction in the market, Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, said.
Foreign investor interest has also extended to the debt market. They invested ₹852 crore in debt through the Fully Accessible Route (FAR), while they pulled out ₹995 crore through the general route during the period under review.
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