The stock market has experienced significant turbulence recently, which has directly impacted Foreign Portfolio Investors (FPIs). Amid tensions in the Middle East and rising crude oil prices, foreign investors made large sales over four months. However, sentiment is improving now, and FPIs have demonstrated a strong return, expressing confidence in the Indian market.
In July, foreign portfolio investors returned to the Indian stock market, investing 20,200 crore rupees. This trend continues in August, with a large purchase of 12,921 crore rupees made in just five trading days. Previously, intensive selling by FPIs over four months negatively affected market sentiment.
According to a PTI report, depository data shows that over four months, foreign investors withdrew approximately two and a half lakh crore rupees from the Indian market. In March, 1.17 lakh crore rupees were withdrawn, followed by 60,847 crore rupees in April, 32,963 crore rupees in May, and 49,340 crore rupees in June.
Comparing with the current year, it should be noted that before the major sales in March this year, FPIs invested 22,615 crore rupees in February. Currently, despite new investments in August following July, the total volume of foreign investor sales in 2026 exceeds the total sales volume for all of 2025. To date, FPIs have sold 2.41 lakh crore rupees, whereas the sales volume for the entire year 2025 was 1.66 lakh crore rupees.
Market experts, citing the report, attribute the return of foreign investors to the expectations of lower interest rates in the US (US Policy Rate), falling crude oil prices, and the stability of the Indian rupee. Vedant Gupta, co-founder of the investment firm Trackk, believes that the Reserve Bank of India's (RBI) assessment of India's GDP growth and inflation played a significant role in the investor return.
Pabitra Mukki, Deputy Vice President of Research at Bajaj Broking, links this phenomenon to the decrease in geopolitical tensions. Meanwhile, Vikay Vijayakumar, Chief Investment Strategist at Geojit Investments, notes that foreign investors are now actively investing in the automotive, consumer goods, and healthcare sectors.
