After three months of continuous selling, FPIs made a strong comeback in the first week of February.
highlights
- After three months of continuous selling, FPIs made a strong comeback in the first week of February.
- Foreign investors regained confidence due to India-US trade deal, better risk sentiment and strengthening rupee.
- According to experts, further FPI inflows are likely if the rupee remains stable and corporate earnings are strong.
After the India-US trade deal, its impact has started being visible in the Indian stock market. After three months of heavy selling, foreign portfolio investors (FPIs) have started buying again in the Indian stock market in the first week of February. Due to improving risk sentiment and positive signals related to India-US trade deal, FPIs have made purchases of more than Rs 8100 crore during this period. According to depository data, earlier FPIs were continuously withdrawing money from the market.
In January, foreign investors had sold Rs 35962 crore. Whereas Rs 22611 crore was withdrawn in December and Rs 3,765 crore was withdrawn in November. Overall, FPIs pulled out a net Rs 1.66 lakh crore (USD 18.9 billion) from Indian equities in 2025, one of the worst periods for foreign investment. The selloff was driven by volatile currency movements, global trade tensions, concerns over potential US tariffs and elevated equity valuations.
Confidence in India’s growth outlook
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According to the data, till February 6, 2026, FPI has invested Rs 8129 crore. Himanshu Srivastava, Principal Manager Research, Morningstar Investment Research India, said the recent purchases reflect improved risk appetite and renewed confidence in India’s growth outlook, PTI reported.
He said reduction in global uncertainties, stable expectations regarding domestic interest rates and optimism regarding India-US trade and policy developments have supported the sentiment. This change is considered quite significant as compared to January. During that time, FPIs were exiting the Indian market due to the global risk-off environment and high levels of US bond yields.
geopolitical uncertainty reduced
Wakarjaved Khan, Senior Fundamental Analyst, Angel One, said that the progress in India-US trade talks has reduced geopolitical uncertainty, due to which the market witnessed a rise. Apart from this, stability in US yields and fiscal stimulus and sector-specific incentives announced in the Union Budget for the financial year also supported the market. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, says that the strengthening of the rupee has also increased the confidence of investors. The rupee strengthened from a record low of 90.30 against the dollar, however, recovered to around 90.70 by the end of February 6.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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