Mumbai: Foreign institutional investors (FIIs) have begun changing their stance in the Indian market. After months of consistent selling, FIIs have now reduced their outflows sharply and even turned buyers on some days. According to data till October 17, FII selling came down to just ₹4,114 crore — a major improvement from the heavy selling seen earlier this year. Analysts say this marks a shift in sentiment as valuations between India and other global markets narrow.
Why FIIs Are Returning
Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said India’s underperformance over the past year has made its market more attractive again. The reduced valuation gap has opened the door for better returns ahead.
He added that signs of strong earnings growth, supported by fiscal and monetary reforms, are helping foreign investors regain confidence. Data also shows strong festive sales in sectors like automobiles and consumer durables — another encouraging sign for the economy.
IPO Market Still Attractive for FIIs
Even as FIIs reduced their activity in the secondary market, they have remained active buyers in the primary market. Analysts noted that lower valuations of IPOs and preferential allotments make them profitable investment opportunities. This steady FII participation in new issues is expected to continue in the coming months.
Market Enters New Week with Optimism
The Indian market is entering a festive and eventful week on a positive note. Cooling inflation, solid domestic fundamentals, and healthy corporate earnings have built a strong base for further gains. Ajit Mishra, SVP of Research at Religare Broking, said the Diwali-week trading will be event-heavy and sentiment-driven. The one-hour muhurat trading session on October 21, marking the start of Samvat 2082, will be closely watched as investors look for festive cheer and renewed market enthusiasm.
