Foreign investors turned net buyers of Indian equities in November, infusing Rs 53,739 crore in the first nine days after two consecutive months of outflows, driven by the AI-led sell-off in global markets, strong domestic earnings growth and attractive large-cap valuations.
The latest investment follows net outflows of Rs 34,843 crore in October and Rs 35,861 crore in September, according to data available with the depositories.
"The sudden change in FPI stance was triggered by the AI sell-off in the US and other AI markets like South Korea, Taiwan and Japan.
"This sell-off, in turn, was triggered by fears surrounding data centre spending in the US. The Democrats, who won both chambers of Congress, are opposed to indiscriminate data centre spending. They will demand guardrails for AI," said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.
The AI-led sell-off has made India, widely regarded as a non-AI trade, an attractive destination for Foreign Portfolio Investors (FPIs).