Mumbai’s stock market is witnessing a remarkable turnaround as foreign institutional investors (FIIs) make a strong comeback. Over the past nine trading sessions, FIIs have pumped in more than $2 billion into Indian equities, sparking a much-needed rally amid recent volatility.
Data from exchanges reveals that on February 9 alone, FIIs net purchased shares worth approximately Rs 2,223 crore. This influx has bolstered investor confidence, pushing benchmark indices higher. However, market experts caution that it’s premature to predict if this foreign money will stick around long-term. Sustained global trade stability, improving corporate earnings, and a weaker US dollar could keep the momentum going, they say.
Domestic institutional investors (DIIs) have been the real heroes, absorbing selling pressure with gusto. In the same period, DIIs bought shares worth nearly Rs 8,973 crore. This underscores a seismic shift: domestic players now hold a larger stake in Nifty 50 than foreigners, thanks to steady inflows from mutual fund SIPs, rising retail participation, and consistent investments from insurance and pension funds.
Global uncertainties, rising foreign interest rates, and a strong dollar had previously made FIIs cautious. Himanshu Shrivastava, Principal and Manager Research at Morningstar Investment Research India, notes that robust domestic flows provide long-term stability, reducing reliance on fickle foreign capital and shielding the market from global shocks.
Recent corrections have made Indian stocks attractive compared to other Asian peers, reigniting FII interest. Clarity on India-US trade deals has further boosted sentiment. Sensex and Nifty surged over 3%, while midcap and smallcap indices jumped 5.66% and 6.3% respectively.
Analysts point to RBI’s dovish stance, GDP recovery signs, strong corporate earnings outlook, and domestic capital strength as key attractants for foreign inflows. Motilal Oswal Securities reports domestic institutions’ Nifty 50 stake at 24.8% in Dec 2025 quarter, edging out FIIs’ 24.3%. This trend signals a more resilient Indian market for the long haul.