Foreign portfolio investors turned net buyers in Indian markets on Friday, infusing ₹1,745.26 crore across all segments, marking a sharp reversal after three consecutive sessions of outflows, according to data from the National Securities Depository Limited.
The week, however, remained volatile for FPI flows. Monday saw a marginal net investment of ₹90.77 crore, followed by steep outflows of ₹617.33 crore on Tuesday and ₹652.74 crore on Wednesday. Thursday witnessed a recovery with net inflows of ₹1,178.18 crore, setting the stage for Friday’s stronger buying.
In the equity segment, FPIs invested a net ₹2,824 crore on Friday, driven primarily by primary market activity worth ₹2,486.47 crore. Stock exchange transactions showed net buying of ₹337.53 crore. This marked a significant turnaround from Wednesday’s heavy selloff, when FPIs pulled out ₹1,424.96 crore from equities. Thursday had seen net equity inflows of ₹1,658.07 crore, indicating sustained buying interest in the final two sessions of the week.
The debt segment witnessed mixed activity throughout the week. On Friday, FPIs withdrew ₹1,183.03 crore from debt instruments, with Debt-FAR seeing the highest outflow of ₹645.60 crore and Debt-VRR recording a withdrawal of ₹815.91 crore. Debt-General Limit attracted ₹277.48 crore. Wednesday had seen the highest debt inflows of the week at ₹798.39 crore, while Tuesday recorded net debt outflows of ₹1,209.98 crore.
Hybrid instruments attracted ₹76.01 crore on Friday, the highest single-day inflow for the segment during the week. Monday saw inflows of ₹130.95 crore in hybrids, while Wednesday recorded a marginal outflow of ₹6.26 crore.
“As the year 2025 draws to a close, there are signs of a reversal of FII outflows witnessed this year and indications of capital inflows in 2026,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. “During the last three trading days FIIs were buyers in the cash market with a total buy figure of ₹3,596 crores.”
Vijayakumar noted that total FPI selling through stock exchanges for December up to December 20 stood at ₹21,104 crores, taking the total outflow for 2025 to ₹2,30,964 crores. He added that FIIs invested ₹73,106 crores through the primary market during this period.
“With India’s GDP growth improving steadily and corporate earnings growth indicating an uptrend in the coming quarters, FIIs are likely to turn net buyers in 2026,” Vijayakumar said.
Ross Maxwell, Global Strategy Operations Lead, VT Markets, attributed the recent withdrawal pattern to global factors. “From a global level, higher-for-longer interest rates in the US and a stronger USD have raised the relative attractiveness of developed-market assets, reducing the risk premium for emerging markets like India,” Maxwell said.
He added that domestically, “overstretched equity valuations after years of outperformance have made India comparatively expensive versus other emerging markets.”
On the currency front, the rupee strengthened from 91.14 to the dollar on Tuesday to 89.29 on Friday, according to market observers. “This strengthening of the currency also helped to stem the tide of FII selling,” Vijayakumar noted, highlighting the rupee’s recovery from its recent lows.
Maxwell expects 2026 flows to be “opportunistic rather than uniformly bullish,” with selective re-entry likely into sectors such as manufacturing, infrastructure, defence, capital goods, and energy transition.
Mutual fund investments by FPIs remained modest, with Friday recording net inflows of ₹29.28 crore. The week started with ₹8.28 crore in mutual fund investments on Monday, while Tuesday and Wednesday saw outflows of ₹13.46 crore and ₹19.91 crore respectively. Thursday recorded an outflow of ₹162.95 crore from mutual funds.