FPIs pump Rs 14,610 cr into Indian equities in Oct; halt 3-month withdrawal streak

New Delhi: After withdrawing money for the past three months, foreign investors have turned net buyers with a net infusion of Rs 14,610 crore in October, supported by resilient corporate earnings, a rate cut by the US Federal Reserve, and hopes of US-India trade talks materialising soon.

This turnaround comes after a prolonged spell of persistent outflows, with FPIs pulling out Rs 23,885 crore in September, Rs 34,990 crore in August, and Rs 17,700 crore in July, data from depositories showed.

The renewed inflow in October, therefore, marks a notable shift in sentiment, reflecting fresh confidence among global investors towards Indian markets.

Explaining the change, Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, said the reversal was driven by improved risk sentiment and attractive valuations, following the recent correction and resilient corporate earnings across key sectors.

He added that the turnaround also coincided with easing inflation, expectations of a softening interest rate cycle, and supportive domestic reforms, such as GST rationalisation, which further strengthened investor confidence.

Vaqarjaved Khan, Senior Fundamental Analyst, Angel One, noted that the latest inflows were "supported by companies posting better Q2 FY26 results, the 25 bps rate cut by the US Fed, and optimism around US-India trade talks materialising soon".

Looking ahead, Morningstar's Srivastava said the sustainability of this trend will depend on continued macro stability, a benign global environment, and consistent corporate earnings in the coming quarters.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that "there are clear signs of earnings recovery now. If brisk demand conditions are sustained, earnings will improve, which in turn will make valuations fair. In such a scenario, FPIs are likely to remain buyers".

Further, Khan believes that FPI inflows could continue in November as outflows from July to September, totalling more than Rs 77,000 crore, were largely driven by global headwinds.

With those pressures now easing and India and the US signalling progress on trade negotiations, sentiment appears poised for further improvement.

However, he cautioned that the quantum of FPI flows will still depend on the timing of the trade deal, the remainder of the Q2 FY26 results, and any further easing signals from the US Federal Reserve.

Despite the recent uptick in equity inflows, FPIs have still withdrawn around Rs 1.4 lakh crore so far in 2025.

Meanwhile, in the debt market, FPIs invested about Rs 3,507 crore under the general limit while withdrawing Rs 427 crore through the voluntary retention route in October.