NEW DELHI: Foreign portfolio investors (FPIs) have demonstrated continued confidence in Indian equities, channeling Rs 12,921 crore into the market during the first week of August. This substantial inflow builds on a robust Rs 20,200 crore investment recorded in July, marking a significant turnaround following a protracted period of heavy selling.

The renewed interest from FPIs is attributed to a confluence of favorable factors, including improving macroeconomic conditions in India, growing expectations of interest rate cuts by the US Federal Reserve, a noticeable moderation in crude oil prices, and the sustained stability of the Indian rupee.

This positive momentum follows a challenging period for Indian markets, where FPIs had executed significant withdrawals. Data from CDSL reveals that FPIs pulled out Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April, and a staggering Rs 1.2 lakh crore in March. This prolonged selling streak had been preceded by an investment of Rs 22,615 crore in February.

Despite this recent surge in buying, a broader perspective reveals that foreign investors remain net sellers in Indian equities for the year 2026, with withdrawals totaling Rs 2.4 lakh crore so far. This figure already surpasses the Rs 1.7 lakh crore outflow recorded throughout the entirety of 2025.

Market experts are largely optimistic about the recent trend. Vedant Gupte, co-founder and CEO of the investment platform Trackk, noted that the current inflows reflect an improving investor sentiment. He highlighted the supportive backdrop provided by anticipated US rate cuts, softer global crude oil prices, and a stable rupee. Furthermore, Gupte pointed to the Reserve Bank of India’s (RBI) improved growth and inflation outlook as a factor bolstering confidence. He also suggested that the relatively low foreign ownership of Indian equities leaves ample room for fresh allocations, indicating a potential for further sustained inflows.

Significantly, Gupte emphasized that a substantial portion of the recent buying activity has occurred through the secondary market. This suggests a stronger, more direct interest in currently listed Indian companies, rather than merely allocations towards Initial Public Offerings (IPOs).