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FIIs Return: India Stocks See Inflows Ahead of Year-End
20 Dec
Summary
- FIIs sold Rs 14,185 crore in December, but outflows slowed this week.
- The Indian rupee recovered after sharp depreciation against the dollar.
- Analysts anticipate renewed FII investment in India during 2026.
Foreign Institutional Investors (FIIs) have significantly reduced their selling of Indian equities in December, with outflows narrowing to Rs 252 crore this week. This moderation follows a substantial Rs 14,185 crore in sales for the month and a cumulative Rs 1,57,860 crore for 2025. Recent buying over the last three sessions, including Rs 1,831 crore on Friday, has sparked hopes for a potential reversal in foreign investment trends heading into 2026.
The Indian rupee experienced a notable rebound, recovering from a low of 91.14 to the dollar on December 16 to 89.29 by December 19. This currency strengthening is seen as a factor that helped curb FII selling. Analysts remain optimistic about FIIs returning to Indian markets in 2026, citing steady GDP growth and improving corporate earnings as key drivers for renewed investment.
Earlier in the year, FIIs offloaded shares worth Rs 76,619 crore in the third quarter of 2025 and experienced significant outflows in the January-March quarter. However, the recent late-year inflows and currency stabilization suggest a potential shift in investor sentiment towards India's economic outlook.
