Investor Flows – FIIs Extend Buying Streak as Market Sentiment Improves
Investor Flows –Foreign institutional investors (FIIs) remained net buyers in the Indian equity market for the second straight week, indicating a gradual improvement in overseas investor sentiment. According to provisional exchange data, FIIs bought shares worth Rs 2,911 crore during the latest week. This followed net purchases of Rs 5,949 crore in the previous week.
Domestic Investors Maintain Strong Buying Activity
Domestic institutional investors (DIIs) also continued to put money into Indian equities. They recorded net purchases of Rs 7,768 crore during the week, with buying activity reported in four of the five trading sessions.
Analysts attributed the continued participation of both foreign and domestic institutions largely to improving investor confidence. The easing of geopolitical tensions has helped reduce uncertainty in financial markets and provided support to overall sentiment.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said sustained buying from FIIs and DIIs was primarily supported by the reduction in geopolitical tensions. According to him, the improvement in the global risk environment has contributed to a more positive market mood.
FIIs Return to Buying Mode in July
Foreign investors also made a notable shift in July after remaining net sellers for four consecutive months beginning in March. FIIs emerged as net buyers during the month, with purchases amounting to $2.5 billion.
The buying was visible across both primary and secondary markets. The primary market attracted net FII inflows of Rs 123 billion in July, while the secondary market recorded net inflows of Rs 110 billion.
The return of foreign buying coincided with gains in the benchmark Nifty index. The index advanced 2.2 per cent in July on a month-on-month basis, following a 1.4 per cent rise in June.
Foreign Ownership in Indian Equities Declines
Despite the recent improvement in FII flows, the overall share of foreign investors in Indian equities has declined significantly over the past decade.
According to a recent note from JM Financial Institutional Securities, FII ownership as a proportion of total Indian equities fell from 20 per cent in July 2016 to 14.3 per cent in July 2026.
At the same time, domestic institutional investors have steadily increased their presence in the Indian market. DII ownership reached 18.7 per cent of total Indian equities in March 2026, highlighting the growing importance of domestic institutional capital.
Primary Market Attracts Foreign Capital
Data covering the past 12 months also shows a clear difference between FII activity in the primary and secondary markets. JM Financial Institutional Securities said Indian primary markets received net FII inflows of $7.8 billion during this period.
The secondary market, however, saw net FII outflows of $42.5 billion. The contrasting figures underline the changing pattern of foreign participation, with overseas investors showing greater interest in new market offerings while reducing exposure through secondary-market transactions.
Nifty Gains as Geopolitical Concerns Ease
Indian equities ended the latest week on a positive note, with the Nifty maintaining an upward bias through most trading sessions. The benchmark index closed at 24,570.65, gaining 187.05 points from the previous week’s closing level of 24,383.60.
Market analysts said easing geopolitical tensions played an important role in supporting investor sentiment during the week. Continued institutional buying, along with improved confidence in the broader market environment, provided additional support to Indian equities.