FPIs resumed buying Indian stocks in July, investing 15,157 crore rupees

According to the Member for All Matters of Time at the Securities and Exchange Board of India (SEBI), domestic institutional investors, including mutual funds and Systematic Investment Plans (SIPs), are acting as a key stabilizing factor for Indian capital markets despite global instability and the outflow of portfolio investments from foreign investors (FPI).

Market Stabilization Driven by Domestic Investors

SEBI Member Amarjeet Singh stated at the 17th ASSOCHAM Mutual Funds Summit in New Delhi on Friday that the sustained participation of local participants provided an important counterforce during the FPI outflow. He added that SIPs have become an integral part of this stability.

Investment Activity in March 2026

The SEBI official noted that even during a period of heightened global uncertainty in March 2026, domestic institutional investors channeled nearly 1.43 trillion rupees into Indian equities. Only equity mutual funds recorded a net inflow of about 43,000 crore rupees.

Meanwhile, according to Reserve Bank of India data, Indian capital markets registered an FPI outflow of $13 billion in March amidst geopolitical uncertainty following the US-Iran war.

Long-Term Approach of Retail Investors

Singh emphasized that the resilience and long-term orientation of domestic investors, led by mutual funds, are becoming increasingly evident during recent market fluctuations. He noted that the mutual fund industry plays a vital role in India's financial market, enabling households to participate in wealth creation over the long term and contributing to the economic growth of ordinary citizens.

Investor patience was also cited as a key factor during turbulent times. Holding period analysis showed a growing long-term orientation among retail investors: over 61 percent of assets managed by retail investors remain invested for more than 24 months. Singh believes this is an encouraging sign that mutual funds are increasingly being used to achieve long-term financial goals rather than short-term market opportunities.

Market Prospects and Warnings

Despite positive trends, the official pointed out that there remains significant potential for mutual fund penetration in India, as less than 5 percent of the population invests in them. Consequently, the future growth of the industry will depend on investor reach across different regions, income segments, and demographic groups.

He also cautioned that investment decisions should be based on financial goals, risk appetite, and investment horizon, rather than fleeting short-term trends. In an environment where social media can amplify flashy returns and trigger Fear of Missing Out (FOMO), goal-oriented products such as lifecycle funds can help investors maintain focus on appropriate asset allocation and long-term financial objectives.

Popularity of Specialized Funds

In addition to SIPs, Specialized Investment Funds (SIFs), introduced only last year, are gaining popularity. The official noted the growing investor demand for differentiated investment solutions within a well-regulated ecosystem. As of May 31, SIFs had already attracted over 13,500 crore rupees in assets under management, distributed across more than 56,000 investor portfolios. He clarified that he is not promoting SIFs as a product, but merely noting how the new product is demonstrating some growth.

The stock market experienced an overall decline, which was caused by the escalation of the conflict between the US and Iran on Saturday. This conflict led to a rise in oil prices, which was reflected in Asian markets, including the Indian market.

Indian Market Dynamics

A drop was recorded in the Indian market: the Sensex index lost over 200 points, while the Nifty showed sideways movement. The most noticeable decline occurred in the midcap and small cap sectors, which fell by 0.34% and 0.55%, respectively.

Leading Stock Performance

Among the top 30 stocks on BSE, 17 showed growth, and 13 were in a declining state. The largest drop was recorded by Kotak Mahindra Bank, which decreased by 3%. A decline of 1% was also noted for Mahindra & Mahindra, Adani Ports, and several other companies.

Overall Index Figures

By 9:30 AM, the Sensex was trading at 76,910.61, showing a fall of approximately 200 points. Nifty dropped by 40 points to reach 24,020. Meanwhile, Nifty Bank demonstrated a decline of more than 200 points. The market decline is attributed to both global tensions and other factors.

BSE Trading Statistics

Of the 3,768 stocks traded on BSE today, 1,543 showed growth, and 2,002 stocks declined. 223 stocks remained unchanged. Additionally, 86 stocks reached fifty-two week highs, and 46 stocks traded at fifty-two week lows. A price ceiling was set for 96 stocks, and a price floor for 124 stocks.