Mumbai’s stock market witnessed a dramatic turnaround in February as foreign portfolio investors (FPIs) pumped in a whopping ₹22,615 crore, marking their strongest monthly inflow in 17 months. This surge reversed a three-month selling spree where FPIs had been net sellers.
The revival comes on the heels of positive developments like the interim India-US trade agreement, improved domestic valuations, and robust third-quarter corporate earnings. These factors reignited investor confidence, flipping the recent outflow trend.
Depository data reveals the scale of prior exits: FPIs withdrew ₹35,962 crore in January, ₹22,611 crore in December, and ₹3,765 crore in November. Over the entire previous year, they offloaded a staggering ₹1.66 lakh crore (about $18.9 billion), driven by currency volatility, global trade tensions, US tariff fears, and elevated stock valuations.
February’s inflow is the highest since September 2024, when FPIs invested ₹57,724 crore. Market analysts had predicted this rebound, citing stabilizing currency and strong long-term prospects for Indian equities.
Brokerage reports highlight how domestic institutional investors (DIIs) played a pivotal role in maintaining market stability amid FPI sell-offs. DIIs now hold a larger share in the market than FPIs, acting as a buffer against volatility.
The trend of channeling domestic savings into equities remains robust. Experts foresee this support propelling equity’s share in household savings higher over the next decade, even as gold’s appeal rises slightly without derailing stock investments.
This FPI resurgence signals renewed optimism, potentially setting the stage for sustained market growth amid global uncertainties.