FPIs invest Rs 38,971 crore in Indian equities in first week of Nov

Foreign portfolio investors (FPIs) have staged a strong comeback in Indian equity markets, pumping Rs 38,971 crore into domestic stocks during the week, according to data from the National Securities Depository Limited (NSDL). The renewed inflows signal a shift in global investment sentiment, as concerns over the sustainability of artificial intelligence (AI)-related investments have triggered a sharp correction in technology stocks across major international markets.
The reversal in foreign investment flows comes after FPIs reduced their exposure to Indian equities in recent months, redirecting funds towards markets benefiting from the global AI investment boom. However, the recent sell-off in technology-heavy markets appears to have prompted foreign investors to reassess their allocations, making Indian equities relatively more attractive.
Global markets witnessed significant selling pressure on Thursday and Friday, led by US technology stocks. All three major US indices registered their steepest single-day losses since April 2025 on Thursday, erasing gains recorded during the previous day's post-election rally.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said institutional investment trends witnessed a sharp reversal last week, with FPIs emerging as aggressive buyers while domestic institutional investors (DIIs) remained net sellers on all trading days.He attributed the shift in investment flows to the correction in AI-focused markets, including the United States, South Korea, Taiwan and Japan, amid growing concerns over the scale and sustainability of investments in data centres.According to Vijayakumar, India's relatively limited exposure to the AI investment-driven market rally, combined with strong corporate earnings growth and attractive valuations among large-cap stocks, has enhanced the country's appeal as an investment destination.He further noted that aggressive FPI buying, coupled with a short squeeze in the derivatives market, triggered a sharp rally in domestic equities, with the Nifty gaining 7.58 per cent during the week.
Foreign investors largely concentrated their purchases in index heavyweight stocks across the financial services, information technology, automobile and telecommunications sectors, providing significant support to benchmark indices.The renewed foreign inflows come at a time when global investors are reassessing the pace of AI infrastructure expansion and the financial returns from massive investments in data centres. Any moderation in capital allocation towards AI-related businesses could influence global fund flows, potentially benefiting markets such as India that offer alternative investment opportunities supported by domestic consumption and corporate earnings growth.For Indian equities, the return of foreign capital could provide an important source of support, although the sustainability of these inflows will depend on global risk appetite, currency movements, earnings performance and valuations in the coming weeks,noted experts.