The Indian stock market saw some relief in July. After four consecutive months of selling, foreign portfolio investors (FPIs) have once again turned buyers in the Indian market, investing around ₹20,200 crore in July. Attractive valuations for the Indian stock market, improving corporate profits and an improving global environment are believed to be the main reasons behind this change in foreign investor sentiment.
It is worth noting that foreign investors had earlier withdrawn a significant amount from the Indian market for four consecutive months. They sold ₹49,340 crore in June, ₹32,963 crore in May, ₹60,847 crore in April and a record ₹1.17 lakh crore in March. However, in February, FPIs invested ₹22,615 crore in the Indian stock market.
Despite the buying in July, foreign investors have withdrawn a total of Rs 2.54 lakh crore from the Indian stock market so far in 2026, much higher than the withdrawal of Rs 1.66 lakh crore in 2025.
According to market experts, rising volatility in markets like South Korea and Taiwan and investment risks in the semiconductor sector have attracted foreign investors to relatively stable markets like India. The stability of the rupee and reasonable valuations of major Indian stocks are also strengthening investor confidence.
V.K. Vijayakumar, chief investment strategist at Geojit Investments, said that amid increasing uncertainty in global markets, India has emerged as a stable option for foreign investors. According to Vedant Gupte, co-founder and CEO of investment platform Track, strong quarterly results from companies have strengthened investor sentiment. In particular, IT sector stocks have seen a surge after better-than-expected performance, and concerns about the impact of AI have eased somewhat.