Foreign Portfolio Investors (FPIs) injected ₹3,346.94 crore into Indian stock markets this week, following a boost in investor sentiment after the Reserve Bank of India (RBI) delivered a surprise 50 basis points repo rate cut, reducing the benchmark rate to 5.5%. The decision, announced by the RBI’s Monetary Policy Committee (MPC) on June 6, provided a strong policy signal aimed at spurring economic activity, and drove robust FPI inflows during the first three trading sessions of the week, from June 9 to June 13, according to data from the National Securities Depository Limited (NSDL).
The central bank’s unexpected dovish turn was interpreted by markets as a move toward a more accommodative stance amid moderating inflation pressures. This led to foreign investors making substantial purchases across sectors including banking, capital goods, and consumer-focused stocks during the initial part of the week.
Highlights:
FPIs infused ₹3,346.94 crore in Indian equities during June 9–13.
RBI’s 50 bps repo rate cut to 5.5% boosted investor sentiment.
Early-week inflows driven by easing interest rate outlook and growth optimism.
Geopolitical Tensions Reverse FPI Sentiment by Week’s End
Despite the early inflows, FPIs withdrew ₹3,275.76 crore on Friday alone, as geopolitical tensions between Israel and Iran resurfaced, prompting a risk-off sentiment. Heightened geopolitical uncertainty has historically driven global investors to move funds away from emerging markets like India into traditional safe-haven assets such as gold and U.S. Treasuries. The sudden shift in sentiment erased much of the weekly gains and underscored the fragility of capital flows under volatile macro conditions.
This volatile exit on the last trading day significantly trimmed the week’s net inflow figure, exposing the vulnerability of foreign capital to global events, especially when equity valuations are elevated and external risks loom large.
Highlights:
FPIs pulled ₹3,275.76 crore from equities on June 14 alone.
Ongoing Israel-Iran conflict weighed heavily on sentiment.
Investors moved capital to safe-haven assets like gold and bonds.
June Still in the Red Despite Weekly Recovery; May Remains 2025’s Best Month
Despite the net weekly inflow, June’s overall FPI activity remains negative, with a total net outflow of ₹5,402 crore so far, reflecting investor caution amid global uncertainties. This comes after a particularly strong ₹19,860 crore net inflow in May, which stands out as the best-performing month of 2025 in terms of foreign investment into Indian equities.
In contrast, the preceding months saw aggressive selling. March recorded ₹3,973 crore in FPI outflows, while January and February witnessed sizeable net equity sales of ₹78,027 crore and ₹34,574 crore respectively. These figures illustrate how foreign investor behavior in 2025 has been heavily influenced by both domestic monetary policy and global macro events.
Highlights:
June net FPI outflow: ₹5,402 crore so far despite RBI rate cut.
May saw ₹19,860 crore inflow — best month for FPI in 2025.
Jan–Feb witnessed cumulative FPI outflows of over ₹1.12 lakh crore.
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