Indian Stock Market Rise: Why Foreign Investors Are Back With $2.28 Billion

Indian Stock Market Rise: Foreign Investors Return to Indian Equities With $2.28 Billion Buying

Foreign investors are making a strong comeback in the Indian stock market, injecting more than $2 billion into domestic equities within just 10 days. The sudden improvement in foreign portfolio investor (FPI) sentiment comes at a time when global markets are facing selling pressure, particularly in artificial intelligence (AI) and semiconductor-related stocks.

FPIs invested a combined $2.28 billion through stock exchanges and primary market transactions during the period. Interestingly, the buying was almost equally divided between the two routes.

According to the available investment data, foreign investors purchased $1.14 billion worth of shares through stock exchanges, while another $1.14 billion entered through primary market investments and other transactions.

The development is significant for Dalal Street, which has experienced substantial foreign investor selling over recent financial years.

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Indian Stock Market Rise: Jio Platforms Listing Drives Nearly Half of FPI Buying

One of the biggest reasons behind the latest foreign investment surge was the record-breaking listing of Jio Platforms on October 28.

The listing attracted approximately $1.1 billion, accounting for nearly half of the total FPI buying during the 10-day period.

Jio Platforms shares listed at ₹1,358 apiece, representing a 21.4% premium over the issue price. The stock subsequently closed its debut trading session at ₹1,419.

The successful listing strengthened investor confidence in India’s primary market and highlighted the growing appetite for large Indian businesses.

For Reliance Industries, which holds approximately 66% of Jio Platforms, the listing also represents an important value-unlocking opportunity.

Key Factors Behind $2.28 Billion FPI Investment in Indian Equities

India’s Stock Market Gains Appeal Amid Global AI Sell-Off

Another important factor supporting FPI investment in Indian equities is the growing difference between domestic market performance and global technology stocks.

Markets with significant exposure to artificial intelligence and semiconductor companies, including the Nasdaq, Kospi and Taiwan’s Taiex, have experienced considerable selling pressure.

India, meanwhile, has attracted attention as an alternative to the crowded global AI trade.

Domestic benchmark indices gained approximately 2% during October, outperforming several emerging markets.

This relative resilience has encouraged investors to consider traditional Indian businesses, domestic consumption and earnings growth as potential investment opportunities.

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FPIs Buy Over $2 Billion in 10 Days

Foreign Portfolio Investors (FPIs) purchased over $2 billion in Indian markets in 10 days, according to data from NSDL.

Key Highlights

• Total FPI investment: $2.283 billion through stock exchanges and primary markets.

• Stock exchange investment: $1.143 billion.

• Highest investment day: October 28, with $1.112 billion through exchanges and primary markets.

• November 2 investment: $468 million.

• October 23: FPIs recorded net selling of $239 million through stock exchanges but remained net buyers overall, with $16 million in combined markets.

   

Foreign investors return to Indian equities with $2.28 billion

Despite the latest buying, foreign investors’ broader investment position remains challenging.

According to JM Financial, the FPI selling cycle across FY2025, FY2026 and FY2027 has been the deepest on record.

Since July 2022, foreign investors have sold $51.5 billion in secondary markets while investing $36.3 billion in primary issues and other off-market transactions.

India’s weight in the MSCI Emerging Markets Index has also declined from 20% in July 2024 to 10.7% in September 2026.

This reduction can limit structural allocations from benchmark-tracking foreign funds.

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Indian stock market outperforms several emerging markets in October

Here’s what happened today and why traders reacted

Several global and domestic developments have influenced foreign investor sentiment.

• Crude oil prices: Brent crude declined to $104 per barrel from $115, easing some pressure on India’s import bill.

• US Federal Reserve: The Fed maintained interest rates at 3.75%–4.00%, while its commentary was less hawkish than expected.

• US bond yields: The 10-year Treasury yield softened to 5.0%.

• Indian rupee: Relative currency stability following RBI measures has supported investor confidence.

• Tax expectations: Discussions around a possible long-term capital gains tax adjustment for foreign institutional investors have also improved sentiment.

These developments have helped strengthen the investment case for Indian equities.

What Impact Could This Have on Investors?

The return of FPI buying is an encouraging signal for Indian stock market investors. Sustained foreign inflows could improve liquidity, support large-cap stocks and strengthen sentiment towards the Nifty 50 and Sensex.

However, traders should not assume that 10 days of buying confirm a long-term reversal.

According to Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, Brent crude prices, geopolitical developments involving the US-Iran and Russia-Ukraine conflicts, and quarterly earnings announcements will remain important market triggers.