FPIs Return to Indian Equity Markets, Invest Rs 38,971 Crore in a Week

Foreign portfolio investors (FPIs) have returned to Indian equity markets, investing Rs 38,971 crore during the week, according to data from the National Securities Depository Limited (NSDL).

The renewed foreign inflows come amid a sharp correction in global technology stocks, triggered by concerns over the sustainability of artificial intelligence (AI)-related investments and a possible slowdown in data centre spending.

Foreign investors had earlier reduced their exposure to Indian equities as global investments shifted towards AI-focused markets. However, the recent sell-off in global technology stocks appears to have made Indian equities more attractive, prompting a reversal in investment flows.

Global markets witnessed heavy selling on Thursday and Friday, with US technology stocks leading the decline. All three major US indices recorded their steepest single-day losses since April 2025 on Thursday, wiping out gains from the previous day’s post-election rally.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said institutional investment trends witnessed a sharp reversal last week, with FPIs turning aggressive buyers while domestic institutional investors (DIIs) remained net sellers on all trading days.

He attributed the shift to the correction in AI-focused markets, including the United States, South Korea, Taiwan and Japan, amid concerns over rising data centre investments.

According to Vijayakumar, India’s positioning as a relatively non-AI-focused investment destination, coupled with strong corporate earnings growth and attractive large-cap valuations, has strengthened its appeal among foreign investors.

He added that aggressive FPI buying and the resulting short squeeze triggered a sharp rally in domestic equities, with the Nifty gaining 7.58 per cent during the week.

Foreign investors were major buyers in index heavyweight stocks across the financial, information technology, automobile and telecom sectors.

The renewed inflows come as global investors reassess the pace and financial sustainability of investments in AI infrastructure.

-ani