FPI Buying Stays On Track In September, Extends Strong Foreign Investment Momentum From July-August

New Delhi: Foreign portfolio investors (FPIs) have maintained their buying momentum in Indian equities at the start of September, extending the positive trend seen during July and August.

During the first four days of September, FPI inflows into Indian equities stood at around Rs 2,374 crore, indicating that foreign investors are gradually becoming more consistent buyers.

India Gains as Chip Trade Cools

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the cooling of the global chip trade and FPI selling in semiconductor stocks in South Korea and Taiwan have helped redirect some foreign capital towards India.

India’s stronger-than-expected economic performance is another factor supporting investor sentiment. The economy recorded GDP growth of 7.8% in Q1 FY27, strengthening confidence in the domestic growth outlook.

Better-than-expected first-quarter corporate earnings have also added to the positive sentiment surrounding the Indian stock market.

Stronger Rupee Supports FPI Sentiment

The recent recovery in the Indian rupee is another favourable factor for overseas investors.

Large inflows through the FCNR(B) deposit scheme, which attracted around $127 billion, have helped strengthen the domestic currency.

The rupee has appreciated from a low of 96.96 against the US dollar in May to 94.49 on September 4.

A stable rupee makes Indian assets more attractive to FPIs by reducing the risk of currency-related losses.

Global Bond Yields Remain Key Risk

The sustainability of foreign investment flows, however, will depend heavily on global bond yields and US monetary policy.

“The FPI flows will be primarily influenced by the bond yields which are rising globally,” Vijayakumar said.

The coming weeks will therefore be crucial in determining whether the recent FPI recovery develops into a sustained trend.