Foreign Investors Pour ₹16,621 Crore Into Indian Equities in August

Foreign Portfolio Investors (FPIs) have returned to buying Indian equities, investing ₹16,621 crore during the first two weeks of August 2026. The buying marks a change in foreign investor behaviour after months of heavy selling from overseas investors.

The renewed investment comes as Indian stocks become more attractive on relative valuations, while corporate earnings have remained steady. Expectations that the US Federal Reserve could move towards lower interest rates have also improved sentiment towards emerging markets such as India.

The August inflow follows ₹20,200 crore of foreign investment in July, when FPIs also turned net buyers after four consecutive months of selling. This suggests that foreign investors have started to reassess Indian equities after a difficult first half of 2026.

However, the return of foreign money does not mean the market has completely turned positive. Indian equities remained under pressure on 18 August as rising crude oil prices and renewed geopolitical tensions in the Middle East affected investor sentiment. The Nifty 50 fell 0.55% to 24,154.90, marking its sixth consecutive session of losses, while the Sensex declined 0.63% to 77,235.46.

Higher crude prices are an important concern for India because the country depends heavily on imported oil. A sustained rise in crude prices can increase costs for companies, put pressure on inflation and affect India’s trade balance. It can also influence the rupee and the wider flow of foreign capital.

Despite these concerns, corporate earnings have provided some support to the market. Nifty 50 companies recorded 18% average profit growth in the June 2026 quarter, the strongest growth in 10 quarters, according to analysis from five brokerages. Nineteen sectors also performed better than expected.

This combination of better earnings and more reasonable valuations is helping attract foreign investors back to Indian stocks. The return of FPIs is important because foreign institutions control large pools of capital and their buying or selling can influence market prices, especially in large companies.

The foreign buying also comes alongside continued participation from Indian investors. Equity mutual funds recorded net inflows for the 65th consecutive month in July, although overall equity fund inflows fell 14.8% from June. Small-cap funds attracted record inflows, while mid-cap funds also continued to receive money.