FIIs turn net buyers of Indian stocks, first time in 4 months

Foreign institutional investors (FII) turned net buyers for the first time in four months, investing ₹4,223 crore in Indian stocks in April 2025.

FIIs were net sellers in seven months in fiscal 2025, and the outflows increased significantly after October 2024, when the foreign investors sold equity worth almost ₹1 lakh crore.

The data comes amid volatility in global markets after U.S. President Donald Trump’s tariff announcement. Foreign funds bought debt securities and sold equities in March 2025 and this trend reversed in April. The increase in foreign inflows in equities assumes significance following the 90-day pause on U.S. tariffs until July 9. U.S. Treasury Secretary Scott Bessent had said recently that India may be among the first few nations to seal a trade deal with the U.S.

The optimism of foreign funds was “mainly because of the dollar index, which was around some 105, 104 levels, going down to 100 or 99, and our currency also relatively did much better,” said Shrikanth Chouhan, head of research at Kotak Securities. A large section of these foreign investment inflows were into banking, financial services and insurance because of the RBI’s accommodative stance and reducing exposure to IT in fear of U.S. recession hitting their earnings.

Rupee’s best gain

Meanwhile, the rupee on Wednesday witnessed its most significant single-day appreciation since November 2022 by gaining 42 paisa against the U.S. dollar.

“This surge can be attributed to month-end adjustments and a technical sell-off in the U.S. dollar leading up to the holiday. Despite prevailing geopolitical tensions, trader caution was somewhat offset by the Reserve Bank of India’s apparent absence from the market and the strengthening of other Asian currencies, providing support to the rupee,” said Dilip Parmar – Senior Research Analyst, HDFC Securities.

“Looking ahead in the near term, the spot U.S. Dollar/Indian Rupee pair finds support around the 84.10 level and faces resistance near 85.50. The current bias appears to favour further strengthening of the rupee,” he added..