India FPIs buy Rs 15,157 cr equities in July, ending four-month sell-off
Foreign portfolio investors ended a four-month exodus from Indian equities in July, a tentative shift in sentiment that eases pressure on local markets but leaves 2026 net outflows at a stark Rs 2.6 lakh crore.
Foreign portfolio investors purchased a net Rs 15,157 crore of Indian equities in July, halting a relentless selling streak that had drained the market of capital since March. The inflow marks a sharp pivot from the Rs 49,340 crore pulled in June, providing a measure of relief for domestic benchmarks.
The magnitude of the recent selling underscores the scale of this reversal. According to Central Depository Services data, foreign investors had withdrawn Rs 1.17 lakh crore in March, Rs 60,847 crore in April, and Rs 32,963 crore in May. The only prior monthly inflow this year was a Rs 22,615 crore investment in February.
Despite the July reprieve, the broader trend remains heavily negative. Net outflows for 2026 have now reached Rs 2.6 lakh crore, easily surpassing the Rs 1.66 lakh crore withdrawn during the same period in 2025. Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India, attributed the July turnaround to improving global risk appetite and easing energy price concerns following this month's geopolitical de-escalation. "Renewed confidence in India's macroeconomic fundamentals" also supported the buying, he said.
Debt attraction grows
While equity flows remain volatile, foreign capital is finding a steadier home in Indian debt. FPIs allocated Rs 6,625 crore to debt securities through the Fully Accessible Route in July, alongside Rs 3,228 crore via the general route. Analyst Vijayakumar noted that recent government taxation changes have made Indian debt more attractive to foreign investors, a dynamic that is contributing to rupee stability.
The sustainability of this equity recovery is far from guaranteed. Srivastava cautioned that future foreign flows will depend on global developments and the continued resilience of India’s domestic growth story. For market participants, the July data serves as a temporary stabiliser rather than a definitive bottom, with the massive year-to-date deficit leaving Indian assets highly sensitive to any sudden shift in global risk sentiment.
