Foreign Portfolio Investors (FPIs) staged a sharp turnaround in early February, infusing Rs 19,675 crore into Indian equities in the first fortnight, buoyed by the US-India trade deal and easing global macroeconomic concerns.The inflows come after three consecutive months of significant outflows. FPIs had pulled out Rs 35,962 crore in January, Rs 22,611 crore in December, and Rs 3,765 crore in November, as per data from depositories.

2025 sees steep net outflows despite February buying

Despite the recent buying, overall foreign investor sentiment in 2025 has remained weak. FPIs have pulled out a net Rs 1.66 lakh crore ($18.9 billion) from Indian equities so far this year, marking one of the worst phases for foreign fund flows.The earlier selling was attributed to volatile currency movements, global trade tensions, concerns over potential US tariffs, and stretched equity valuations.As per the depository data, FPIs invested Rs 19,675 crore in February so far (till February 13).

Softer US inflation, stable domestic macros aid sentiment

According to news agency PTI, Himanshu Srivastava, principal manager–research at Morningstar Investment Research India, said the recent buying was supported by easing global macro concerns, particularly softer US inflation data.This, he noted, led to positive sentiment around the interest rate cycle, helping stabilise bond yields and the US dollar, thereby improving risk appetite toward emerging markets, including India.He added that steady domestic macroeconomic indicators, stable inflation, and broadly in-line corporate earnings reinforced confidence in India’s growth outlook.Echoing similar views, Vaqarjaved Khan, senior fundamental analyst at Angel One, said the inflows were triggered by the US-India trade deal, a supportive Union Budget 2026 with fiscal stimulus measures, easing global trade uncertainties, and stable domestic interest rates.

Selling pressure persists despite positive sessions

However, despite the positive headline inflow figure, FPIs have remained net sellers on a month-to-date basis.According to PTI, FPIs were net buyers on seven of the eleven trading sessions in February up to the 13th, turning sellers on only four occasions. Yet, data shows they have net sold equities worth Rs 1,374 crore so far this month.The overall figure was skewed by a sharp sell-off of Rs 7,395 crore on February 13, when the Nifty 50 declined by 336 points.The week also witnessed heavy selling in IT stocks amid the so-called “Anthropic shock”. VK Vijayakumar, chief investment strategist at Geojit Investments, said it is likely that FPIs aggressively offloaded IT stocks in the cash market, as the IT index plunged 8.2 per cent during the week ended February 13.