Mumbai – Foreign investors have come back to India and are buying shares in the primary market, a trend that may keep going, analysts said Friday.
The drop in foreign institutional investor (FII) sales that began in early October is still happening. Until October 25, FIIs sold only ₹3,363 crore worth of shares through exchanges – almost nothing. Instead, they kept buying, putting in a total of ₹10,692 crore in primary‑market deals.
“FIIs are investing steadily in India’s primary market and that has been profitable. We expect the buying trend to continue,” said Dr. VK Vijayakumar, chief investment strategist at Geojit Investments.
On Thursday, however, FIIs turned net sellers, pulling out ₹1,166 crore after five straight days of buying. The sell‑off likely reflects profit‑booking. Domestic institutional investors (DIIs) kept backing the market with net inflows of ₹3,893 crore.
Siddhartha Khemka, head of research at Motilal Oswal, added that FII inflows and positive comments from company managers can keep momentum strong, but occasional profit‑booking can happen. “Progress on a trade deal between India and the U.S. would boost investor confidence further,” he said.
Several factors are pushing FIIs to buy in India, the analysts noted:
1. The price gap between India and other markets has narrowed, reducing the temptation for FIIs to move funds abroad.
2. Indian earnings growth is picking up and is expected to gain more speed in FY27.
3. Diwali sales are at record highs across many goods, showing a resilient economy and strong consumer demand.
4. A potential India‑U.S. trade agreement could lift market sentiment significantly.
These reasons could keep foreign investors on the buying side. But if the market climbs too high, FIIs might sell again, tempering any lasting rally.
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Source: ianslive
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