Foreign Portfolio Investors Become Net Buyers in Indian Stock Market, Record ₹22,600 Crore Inflows in February

Indian Stock Market Sees Highest FPI Inflows in 16 Months

In February, Foreign Portfolio Investors (FPIs) turned net buyers in the Indian stock market, snapping a three-month streak of outflows and recording their highest monthly inflows in the past 16 months. According to data from National Securities Depository Limited (NSDL), FPIs net bought ₹22,615 crore in February, following significant net FPI outflows of ₹35,962 crore in January 2026, ₹22,611 crore in December 2025, and ₹3,765 crore in November 2025.

Despite the revival in FPI inflows, the performance of the Indian stock market remained subdued. The BSE Sensex declined over 1% during the month, while the NSE Nifty 50 slipped 0.5%, reflecting persistent volatility and cautious investor sentiment.

Market experts attribute the renewed FPI interest to improving corporate earnings momentum. The Q3FY26 results indicate a clear pick up in corporate earnings with a 14.7% earnings growth. This trend is likely to continue in the rest of FY26, too, with FY27 earnings growth estimated to be around 15%. Geojit Investments' Chief Investment Strategist, Dr. VK Vijayakumar, suggests that Indian valuations are fair and attractive for FPIs to turn buyers in India.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

However, investor sentiment remains fragile amid escalating geopolitical tensions between the United States and Iran, which unsettled global markets and prompted cautious positioning. Sectoral flows reflected significant divergence during the month, with FPIs being heavy sellers in IT stocks, offloading shares worth ₹10,956 crore in the first half of February alone.

Market Strategy: Caution Warranted The Indian stock market is expected to remain volatile amid escalating tensions in the Middle East. A cautious and selective investment approach is advisable, with a focus on fundamentally strong large-cap companies and sectors with relatively stable earnings visibility such as banking, healthcare, metals, pharma, and energy. Exposure to export-oriented IT stocks may remain volatile in the near term, and traders are advised to maintain disciplined risk management and avoid aggressive leverage.