Foreign portfolio investors (FPIs) have made a dramatic comeback to Indian equities in November, turning into aggressive buyers after months of heavy selling. Their renewed appetite for domestic stocks has helped the Sensex and Nifty 50 extend their recovery, with market experts citing improving corporate earnings, attractive valuations, and a shift in global investment preferences as key drivers.
The latest monthly NSDL data on flows shows that FPIs have infused ₹84,291 crore into Indian equities in November so far, marking a sharp reversal from the selling seen in most months this year. In comparison, foreign investors were net sellers in January, March, April, May, June, September and October. March recorded the steepest outflow of ₹1.17 lakh crore, followed by April at ₹60,847 crore.
The turnaround began in November, with foreign buying gathering pace through the month. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said FPIs purchased equities worth ₹79,301 crore through 13 November, with buying becoming increasingly aggressive. He believes the trend could continue, potentially making November's inflows a record high.
According to Vijayakumar, a shift in global investment preferences has played an important role in bringing foreign capital back to India.
He attributed the change partly to the victory of the Democrats in the US Congressional elections, which triggered selling in AI stocks amid concerns over greater regulation of artificial intelligence and related spending. This encouraged a rotation towards non-AI investment opportunities, where India offers attractive prospects.