Foreign Investors Return to Indian Equities in October, Ending Three-Month Selling Spree

Foreign portfolio investors (FPIs) have ended their three-month selling streak by becoming net buyers of Indian equities in October, with inflows totaling Rs 14,610 crore, according to data from the National Securities Depository Limited (NSDL).

This marks a significant shift after substantial outflows where FPIs sold Indian stocks worth Rs 17,741 crore in July, Rs 34,993 crore in August, and Rs 23,885 crore in September. The previous selling pressure was largely attributed to the United States implementing a 50% tariff on Indian goods, which negatively impacted global trade sentiment and prompted foreign investors to reduce their exposure.

Despite this volatility and foreign outflows, Indian benchmark indices such as the Sensex and Nifty have maintained their strength. The Sensex remains near its all-time peak of 85,978 recorded in 2024. The indices have demonstrated robust performance, with the Sensex gaining nearly 7% so far in 2025, following strong gains of approximately 9–10% in 2024 and 16–17% in 2023.

The stability of Indian markets is further bolstered by strong domestic economic indicators, including robust Gross Domestic Product (GDP) performance, the positive impact of Goods and Services Tax (GST) reforms, and firm macroeconomic fundamentals. Additionally, expectations of a potential India-US trade agreement have boosted investor confidence.

Despite the positive inflows in October, FPIs have still seen a net divestment of Rs 1.39 lakh crore from Indian equities during 2025 up to the end of October.

Impact The return of FPI buying is a positive signal for the Indian stock market, potentially leading to increased liquidity, stock price appreciation, and renewed investor confidence. It suggests that foreign investors are finding value and stability in India despite global uncertainties. This inflow could support the ongoing bullish trend in Indian equities. Impact Rating: 8/10

Difficult Terms: Foreign Portfolio Investors (FPIs): These are investors from foreign countries who invest in financial assets like stocks and bonds of another country. Equities: Shares of ownership in a company, commonly known as stocks. Inflows: Money coming into a market or investment. Withdrawal Trend: A period where money is leaving a market or investment. Tariff: A tax imposed on imported or exported goods. Benchmark Indices: Stock market indexes like the Sensex and Nifty that represent the performance of a broad segment of the market. Gross Domestic Product (GDP): The total monetary value of all the finished goods and services produced within a country's borders in a specific time period. GST Reforms: Changes and improvements made to the Goods and Services Tax system, an indirect tax levied on the supply of goods and services. Macroeconomic Fundamentals: Key economic indicators and conditions that reflect the overall health and performance of an economy. Net Inflows/Divestment: The total amount of money invested minus the total amount withdrawn over a specific period. Net divestment means more money was sold than bought.