Foreign Investors (FPIs) Keep Indian Markets Strong Despite Tensions

Despite rising tensions between India and Pakistan, foreign investors are showing strong confidence in Indian markets. For the 14th straight trading session, Foreign Portfolio Investors (FPIs) have remained net buyers, investing a total of ₹43,940 crore in Indian equities. This buying streak, the longest in the past two years, is giving a major boost to stock market sentiment.

Market Gains with Strong Support

Due to this foreign buying, India’s key stock indices, the Nifty 50 and Sensex, have jumped over 9% in recent weeks. This performance is better than many Western and Asian stock markets. The gains show that investor confidence in India is rising, even in the face of regional tensions.

Why Are Foreign Investors (FPIs) Buying?

After being net sellers for months since Indian markets peaked in September 2024, foreign investors have returned. They now believe that India’s domestic economy can handle the global trade slowdown better than other countries.

There is also hope that India might soon strike a trade deal with the United States. This optimism grew after U.S. President Trump said last week that both countries were close to finalising a tariff agreement. This potential trade deal is making investors more confident about India’s future growth.

Recovery After October Outflows

After heavy outflows from October 2024, Indian equities found support from domestic investors and institutions. This support helped markets recover in March and build momentum in April. Now, with FPIs also investing heavily, Indian indices are trading near their four-month highs.

Foreign Investors (FPIs) Focus Shifts to Large Caps

Experts say that FPIs are now mainly buying large-cap stocks, as mid-cap and small-cap stocks are seen as overvalued. Dr. VK Vijayakumar from Geojit Financial Services said that the Indian market is showing resilience due to strong FPI inflows and improving global conditions like a weak U.S. dollar and slow growth in the U.S. and China.

Conclusion

Foreign investor confidence is helping Indian markets remain strong, even during geopolitical uncertainty. With solid domestic support and hopes for international trade deals, Indian equities are likely to stay on an upward path.

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