Rupee Recovery Boosts Market Mood, FPIs Likely To Return As Foreign Selling Pressure Eases
Foreign portfolio investors may return to Indian markets as the rupee strengthens and market fundamentals improve. Analysts say easing foreign selling, strong corporate earnings, and lower crude oil prices are supporting sentiment, although weak monsoon conditions remain a concern for economic growth.
Foreign portfolio investors may return to Indian markets as the rupee strengthens and market fundamentals improve. |
New Delhi: Foreign portfolio investors (FPIs) may reduce their selling in Indian stock markets as the rupee continues to recover against the US dollar, analysts said.
Market experts believe a stronger rupee is improving confidence among global investors and could support fresh inflows into Indian equities.
This change is being seen as a positive sign for domestic markets after months of heavy foreign selling.
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Rupee Strengthens Against Dollar
The Indian rupee has shown strong recovery in recent weeks.
It improved from a low of Rs 96.96 per US dollar, touched on May 20, to Rs 94.34 on June 19.
Analysts said this appreciation is making Indian assets more attractive for foreign investors because currency stability reduces investment risk.
A stronger rupee also helps improve overall market sentiment.
FPIs Turn Net Buyers
There has been a clear shift in FPI activity since June 15.
During the week ending June 19, FPIs bought shares on three trading days and sold only on two days.
Overall, they became net buyers of Indian equities worth ₹3,386 crore in the cash market.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said this suggests that the long phase of continuous FPI selling may now be ending.
Strong Fundamentals Support Markets
Analysts also pointed to strong corporate earnings as another major support for the market.
The Nifty 500 companies reported better-than-expected earnings growth of 15.6 percent in FY26.
This is helping strengthen investor confidence and giving markets resilience despite global uncertainties.
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Lower crude oil prices are also providing relief.
Brent crude falling near $80 per barrel is expected to reduce pressure on India’s current account deficit.
Weak Monsoon Still a Concern
Despite the positive outlook, analysts warned that weak monsoon conditions remain a concern.
Poor rainfall can hurt agricultural output, rural demand and inflation trends.
Experts also noted that while FPIs may return, they could still book profits in India during market rallies while continuing to invest in AI-linked
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