Why FIIs Are Buying Indian Stocks Again? ₹14,670 Crore Inflow in 3 Days

India’s equity market is witnessing a strong comeback from Foreign Institutional Investors (FIIs), who have recently infused ₹14,670 crore into the Indian cash market over just three trading sessions from April 15 to April 17, 2025. This sudden turnaround in investor sentiment has sparked renewed confidence and is raising hopes for sustained foreign capital inflows in the weeks to come.

What’s Triggering the Shift?

Until mid-April, FIIs were net sellers, pulling out ₹23,999 crore from Indian equities due to global uncertainties and valuation concerns. However, a visible change in approach emerged mid-month, with renewed interest in Indian stocks signalling a potential shift in market mood.

Read more:FII’s Returned to Indian Securities Market: Highest Net Inflows Since March 27

Weakening US Dollar Boosts Sentiment

One of the primary triggers behind this FII revival is the weakening of the US Dollar Index, which dipped towards the 100 mark. This made Indian equities relatively more attractive when compared to other emerging markets. With India offering lower inflation, controlled crude prices, and promising Q4FY25 earnings—especially in the banking sector—FIIs seem to view India as a better risk-adjusted return market.

Global Trade Tensions Ease

The recent 90-day postponement of US tariffs has calmed global trade fears, creating a more stable outlook. This move, along with softening rhetoric from the US on trade issues, has helped improve global investor confidence. As India’s markets hover around key resistance levels, any decisive move upward could trigger further institutional buying.

India’s Growth Advantage Over US and China

India is expected to grow at 6% in FY26, while the US and China face slower growth. This makes India more attractive for foreign investors. Its stable economy and strong outlook support market confidence.

Earnings Expectations Drive Optimism

While concerns about demand and sector-specific challenges persist, the RBI’s recent interest rate cut—and expectations of more easing ahead—could act as a catalyst for corporate growth. Lower borrowing costs are likely to support credit expansion and boost earnings in the coming quarters, keeping FIIs interested in Indian equities.

Recap of FPI Activity

After being net sellers for nine consecutive trading sessions, FPIs turned buyers on April 15, 2025, with a ₹6,065 crore investment, breaking the previous streak of outflows amounting to ₹38,992 crore. Before this, the last significant inflow occurred on March 27, when FIIs bought ₹11,111 crore worth of Indian equities.

Conclusion

If current trends hold, FIIs may continue their renewed interest in Indian stocks. With strong domestic fundamentals, improving corporate earnings, and reduced global tensions, India appears well-positioned to attract steady foreign investments. If markets break above critical technical levels, a broader rally supported by institutional buying could be on the horizon.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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