FPIs Stage Strong Comeback, Pump Over Rs 20,000 Crore Into Cash Market In Six Sessions

Foreign institutional investors (FIIs) appear to be changing their stance on Indian equities, with overseas investors turning aggressive buyers in the cash market as well as index futures after a prolonged phase of selling. The reversal in flows over the past few trading sessions comes as Indian equities regain momentum, supported by easing crude oil prices and improving global market sentiment.

After turning net buyers on October 28, FIIs have stepped up their purchases in the cash market, with buying gathering pace in November. Foreign investors infused Rs 872 crore on October 28. However, they turned net sellers the following day, offloading equities worth Rs 944 crore. The buying momentum returned on October 30, with net purchases of Rs 3,599

crore, followed by Rs 3,115 crore on November 2. Foreign investors further strengthened their buying on November 3, pumping in Rs 6,837 crore, before making massive net purchases of Rs 7,284 crore on November 4.

This takes their cumulative net buying in the cash market to Rs 20,835 crore over the six consecutive sessions between October 28 and November 4, indicating a significant shift in foreign investor positioning.

Stock markets rallied for the fifth straight day on Wednesday, with the benchmark Sensex climbing nearly 384 points to close above 77,000 on buying in blue-chip financial, FMCG and auto shares amid foreign fund inflows and easing crude oil prices. The 30-share BSE Sensex rose 383.55 points, or 0.50 per cent, to settle at 77,301.40, its highest close in more than two months. During the day, it surged 478.19 points, or 0.62 per cent, to 77,396.04. In the five-day rally through Wednesday, Sensex soared by over 4,000 points or 5 per cent. The 50-share NSE Nifty was up 149.75 points, or 0.63 per cent, to end at 23,960.60.

The trend is not restricted to the cash market. FII activity in index futures has also turned decisively positive, suggesting that overseas investors are increasingly building bullish positions in the derivatives segment.

FIIs were net sellers of index futures worth Rs 609 crore on October 29. However, they turned net buyers with purchases of Rs 132 crore on October 30, followed by Rs 1,491 crore on November 2. Buying accelerated sharply on November 3, when foreign investors pumped in Rs 4,407 crore into index futures. They continued their buying spree on November 4, with net purchases of Rs 2,420 crore.

In the Bank Nifty futures segment, too, FIIs have shown signs of a turnaround. After remaining net sellers on October 30 and November 2, they turned buyers on November 3 and November 4, with net purchases of Rs 160 crore and Rs 171 crore, respectively.

Interestingly, the resurgence in foreign buying has coincided with a reversal in domestic institutional investor (DII) flows. Domestic institutions, which had been supporting the market amid sustained foreign outflows, have turned net sellers in recent sessions. DIIs bought equities worth Rs 1,924 crore on October 29 but sold shares worth Rs 818 crore on October 30 and Rs 392 crore on November 2. The selling intensified in November, with net outflows of Rs 3,679 crore on November 3 and Rs 3,712 crore on November 4.

The contrasting trends suggest that foreign investors are increasingly stepping in to absorb selling from domestic institutions, potentially providing an additional cushion to the market rally.

The sharp improvement in FII flows could provide an important tailwind for Indian equities, particularly if the buying momentum sustains over the coming sessions. Foreign investors’ simultaneous participation in the cash and index futures segments also points towards improving appetite for Indian equities.