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Foreign investors return to selective buying in India’s equity market
FPIs put more than ₹25,000 crore into Indian stocks between 1 and 24 August, with financial services and autos leading after outflows earlier in the year.
Foreign portfolio investors have resumed buying Indian equities after months of heavy selling, but the latest flows suggest a selective approach rather than a broad shift toward India’s overall growth outlook, according to LiveMint Markets.
FPIs invested more than ₹25,000 crore in Indian stocks between 1 and 24 August, the strongest monthly inflow since September 2024, following ₹20,200 crore of buying in July. If the trend continues through August, India could post two consecutive months of FPI inflows for the first time this year, reversing a record ₹1.2 trillion outflow in March.
Sector choices are also pointing to targeted exposure. In the first fortnight of August, financial services drew ₹6,535 crore after an outflow of ₹2,669 crore in the prior fortnight, while automobiles received ₹4,405 crore and consumer services attracted ₹3,398 crore.
LiveMint Markets cited Bank of America’s August fund manager survey showing India has become Asia’s least-preferred equity market, with 32% of respondents net underweight. The article links the rebuilding of exposure to parts of the market with improved valuations and earnings visibility, noting that the Nifty Financial Services index trades at 17.3 times 12-month trailing earnings versus a five-year average of 19.5 times, and the Nifty Auto index at 33.6 times versus an average of 41.8 times.