FPIs Show Cautious Optimism Amid Market Volatility

Foreign Portfolio Investors (FPIs) invested Rs 14,590 crore in India's equity market in June 2025, marking a positive trend for three months. However, in July, FPIs withdrew Rs 1,421 crore. Factors such as global liquidity, geopolitical tensions, and RBI rate cuts have influenced FPI decisions. Future flows depend on upcoming earnings reports.

Foreign investors injected Rs 14,590 crore into the Indian equity market in June, indicating a third consecutive month of investment. Global liquidity improvements, easing geopolitical tensions, and a Reserve Bank of India rate cut supported this trend.

Nevertheless, foreign portfolio investors became net sellers in July, withdrawing Rs 1,421 crore in the first week, according to depository data. The near-term FPI flows are expected to remain volatile due to tariff deadlines and U.S. data fluctuations, as stated by Vaqarjaved Khan, a Senior Fundamental Analyst at Angel One.

The outcome of Q1FY26 results will significantly influence FPI activity. Assurances of earnings recovery will provide a positive push; however, disappointment may adversely affect market sentiment and FPI flows, according to V K Vijayakumar, Chief Investment Strategist at Geojit Investments.

(With inputs from agencies.)