FPIs pump ₹44,000 crore into Indian stocks over 14 straight sessions despite India-Pakistan tensions

Stock market today: Overseas investors' optimism toward Indian equities remains intact despite rising India-Pakistan tensions, as they continue buying for the 14th straight session, providing strong support to the Indian stock market.

FPIs shifted their stance towards the Indian stock market in the second half of April and have extended their buying spree into May. They have remained net buyers for 14 consecutive trading sessions, pumping in a cumulative ₹43,940 crore into Indian equities, according to data compiled by Livemint.

During this period, both the Nifty 50 and Sensex have gained over 9%, outperforming their Western and Asian peers. This marks the longest buying streak by overseas investors in the past two years.

Why are FIIs buying Indian stocks?

Having largely been sellers in the months since Indian benchmarks touched record highs in September, foreign investors are returning amid growing optimism that India’s domestically driven economy will weather the global trade slowdown better than most peers.

Additionally, optimism that India could be among the first nations to strike a trade deal with the US has further encouraged investors to reassess their stance on Asia’s third-largest economy. Last week, President Trump expressed optimism about ongoing trade negotiations, suggesting that the two countries are close to finalising a tariff agreement.

After October 2024, global money was largely pulled out of Indian equities. However, strong support from domestic investors and institutional buying helped the market rebound in March, with momentum carrying forward into April.

With FPI inflows now joining domestic buying, Indian benchmark indices have recovered most of their losses and are trading near four-month highs. The reversal in sentiment is also supported by domestic fundamentals, with the RBI cutting the repo rate twice and injecting billions of rupees into the financial system to boost lending.

Shift to large caps gains pace as FPIs avoid overvalued mid & small caps: Experts

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “What stands out in ‘Operation Sindoor’ from a market perspective is its focused and non-escalatory nature. We have to wait and watch how the enemy reacts to these precision strikes by India. The market is unlikely to be impacted by the retaliatory strike by India, as it was already anticipated and priced in.”

He said the main catalyst behind the market's resilience in India is the sustained FII buying over the last 14 trading days, which has touched a cumulative figure of ₹43,940 crore in the cash market. FIIs are focused on global macros such as a weak dollar, slower growth in the US and China in 2025, and India’s potential to outperform in terms of growth. This, according to Vijayakumar, can help keep the market resilient. However, investors should closely monitor developments along the border.

“The big shift in market preference in favor of large caps, away from the overvalued segments of mid- and small caps, is significant. FIIs, as always, are mainly buying large caps. This trend can continue,” he added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.