FIIs buy record Rs 84,000 crore in Indian stocks this month, but there are two warning signs

Foreign institutional investors (FIIs) have made a dramatic return to Dalal Street, pumping more than Rs 84,000 crore into Indian equities in the first two weeks of November and helping the Nifty stage a sharp recovery after months of relentless selling.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 84,291 crore between November 2 and 13, according to depository data, marking one of the strongest buying sprees in recent years. The renewed interest has helped the Nifty rebound more than 13% from its October 8 closing level, although its November-to-date gain stands at 9.1%.

The buying marks a sharp reversal from September and October, when foreign investors withdrew Rs 35,861 crore and Rs 34,843 crore, respectively, from Indian equities.


Despite the November inflows, foreign investors remain net sellers of more than Rs 2 lakh crore in 2026, reflecting the scale of the withdrawals earlier this year. The reversal has raised hopes that Indian equities could be entering a more sustained recovery, although rising inflation, crude oil prices and geopolitical uncertainty remain potential obstacles.

The buying continued through the holiday-shortened week ended November 13, with foreign investors remaining net buyers in all four trading sessions.

According to Pabitro Mukherjee, Deputy Vice President–Research at Bajaj Broking, FIIs purchased shares worth a net Rs 33,340 crore during the week, extending their buying streak to a third consecutive week after ten weeks of selling.
Domestic institutional investors (DIIs), meanwhile, sold equities worth a net Rs 24,190 crore during the week, remaining sellers for the second consecutive week.

"Benchmark indices remained range-bound with a positive bias during the week, closing marginally higher amid sustained FII inflows and a moderation in Brent crude prices," Mukherjee said.

What's bringing foreign investors back?
A combination of improving corporate earnings, falling crude oil prices and changing global investment preferences has helped revive foreign interest in Indian equities. The selloff in global artificial intelligence-linked stocks has encouraged some investors to reduce exposure to technology-heavy Asian markets and reconsider Indian stocks, particularly large-cap companies.

India's September-quarter corporate earnings have also shown signs of improvement, with several brokerages reporting stronger profit growth and a higher proportion of companies beating estimates.

Lower crude prices have added to the appeal of Indian equities, given the country's dependence on imported oil and the pressure higher energy costs place on inflation and corporate margins.

The foreign buying helped India regain its position as the world's fifth-largest equity market, ahead of Taiwan. HSBC also upgraded Indian equities to overweight, while Citi and Bernstein raised their Nifty targets amid improving sentiment.

Can the buying continue?
The immediate challenge for the market is whether foreign investors will sustain their purchases as inflation and interest-rate concerns return to focus. India's October retail inflation rose to 6.09%, breaching the Reserve Bank of India's upper tolerance limit of 6%, while crude oil prices rebounded towards $96 a barrel by the end of the week.

Mukherjee said stronger-than-expected inflation readings in India and the US had capped market gains as investors reassessed the outlook for interest rates ahead of the December policy meetings. "In the coming weeks, the sustainability of these foreign inflows will be the key variable," Mukherjee said.

He added that investors would closely monitor developments involving the US and Iran, particularly their impact on crude oil prices.

The minutes of the US Federal Open Market Committee's meeting and India's wholesale inflation data will also be watched for indications about the direction of monetary policy.

Another notable change has been the reversal in domestic institutional activity. DIIs, which had previously absorbed substantial foreign selling, have been booking profits as overseas investors return. The divergent flows suggest that the market's next move could depend heavily on the pace of foreign purchases.


Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.