FPI Buying Stays On Track In September, Extends Strong Foreign Investment Momentum From July-August

New Delhi: Foreign portfolio investors (FPIs) have continued their buying trend in Indian equities as September began, building on the upbeat momentum observed in July and August. In the first four days of September, FPI investments into Indian equities totaled around Rs 2,374 crore, suggesting a growing consistency among foreign investors.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, explained that the slowdown in the global chip trade and selling pressure in semiconductor stocks from South Korea and Taiwan have steered some foreign capital back to India. India's robust economic performance, with a GDP growth of 7.8% in Q1 FY27, and strong corporate earnings have bolstered investor confidence in the domestic market.

The Indian rupee's recovery also aids FPI sentiment, as large inflows from the FCNR(B) deposit scheme, totaling around $127 billion, have strengthened the domestic currency. The rupee has risen from 96.96 against the US dollar in May to 94.49 on September 4, making Indian assets more appealing to foreign investors by lowering currency risk.

However, the sustainability of this foreign investment surge will largely depend on global bond yields and US monetary policy decisions.