Foreign portfolio investors (FPIs) turned net buyers in Indian equities in July, breaking a four-month streak of heavy outflows, even as overall flows in 2026 remain under pressure, according to Business-Today.
Net FPI equity inflows stood at nearly $1.6 billion (Rs 14,946 crore) till July 24, marking a reversal after sustained selling between March and June. Supported by continued buying in debt, total FPI inflows across asset classes rose to nearly $4.4 billion (Rs 41,796 crore) in July, making it the strongest month for foreign inflows so far this year and surpassing February's $4.2 billion (Rs 37,804 crore).
Equity Reversal After Heavy Outflows
Equity markets had witnessed intense selling pressure earlier in the year, with a cumulative sell-off of over $27.8 billion across four months, as reported by Business-Today. The monthly outflows were:
| Month | Equity Outflows (USD) | Equity Outflows (Approx INR) |
|---|---|---|
| March | $12.7 billion | ~Rs 1.06 lakh crore |
| April | $6.5 billion | ~Rs 54,000 crore |
| May | $3.5 billion | ~Rs 29,000 crore |
| June | $5.2 billion | ~Rs 43,000 crore |
This cumulative sell-off was only partly offset by July's inflows, leaving year-to-date equity flows at a net outflow of $27.7 billion.
Debt Markets Remain Resilient
In contrast to equities, debt markets have remained resilient, attracting $9.5 billion in inflows so far in 2026. According to Business-Today, sustained investor interest in debt followed taxation changes by the government, which bolstered foreign participation in the bond market.
Year-to-Date Flows Still Deeply Negative
Despite the July recovery, total FPI flows across asset classes remain in the red at $18.4 billion (Rs 1.7 lakh crore) so far in 2026, indicating that a durable turnaround will depend on global stability and domestic macro resilience, the report noted.
Primary Market Catalyzes July Recovery
A large chunk of the July inflows came from the SBI Funds IPO, where FPIs participated both in the anchor book as well as the qualified institutional placement (QIP) book. According to V K Vijayakumar, chief investment strategist at Geojit Investments, July inflows have been largely driven by primary market activity, alongside sustained investor interest in debt following taxation changes by the government.
For executives and investors tracking capital flows, the July data signals a potential stabilisation in foreign sentiment toward Indian equities, but the persistently negative year-to-date balance underscores that a full recovery hinges on broader macroeconomic factors.
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