After a disappointing start to the new year, shopping returned this month. In January, foreign equity outflows stood at Rs. 35,962 crore, with a year-to-date net outflow of Rs. 19,050 crores.
Chief Investment Strategist at Geojit Investments Dr. V.K. Vijayakumar sees a clear trend reversal in FPI flows in February. “FPIs were buyers in nine of the last sixteen trading days from February to 20th. As per NSDL data, total FPI investment through exchanges was Rs 14177.66 crore from February to 20th. Further, FPIs invested Rs 2,733.89 crore in the primary market, up from Rs 156 crore from Rs 152 crore in February,” it said.
It also points to the major sectoral changes seen so far in the month. While FPIs sold heavily in IT stocks due to anthropic shocks, they were buyers in financial services and capital goods.
FPI Outlook
Regarding the outlook, Vijayakumar said that the FPI buying trend will continue going forward. A key factor driving FPI inflows could be improvement in corporate earnings, he said, adding that Q3FY26 results showed a clear increase in corporate earnings with earnings growth of 14.7%.
“This trend is likely to continue in the rest of FY26 as well. As per initial estimates, FY27 earnings growth is likely to be around 15%. This will make Indian valuations reasonable and attractive for FPIs to turn to buyers in India,” said a Geojit analyst.
In 2025, the trend of FII buying remained ambiguous, but the overall trend was bearish. They have taken Rs. 1,66,286 crore as trade deals weighed on delay and premium valuation sentiment.
FIIs were net sellers in December, with Rs. 22,611 worth of local stocks were offloaded.
FIIs in the third quarter of CY25 raised Rs. 76,619 crore in Q3 after offloading shares to Rs. 11,766 crore worth of shares were sold.
Also Read: F&O Talk | What does the current long-short ratio say about the position of FIIs? Sudeep Shah on Ola, Newgen, 4 More Top Weekly Movers
In the period April-June 2025, a total of Rs. 38,673 crore saw an inflow; Meanwhile, during the January-March quarter, Rs. 1,16,574 crores was sold massively.
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)
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