Sensex, Nifty cheer as Bulls, FPIs back in Indian stock market; pump in over ₹84k cr in Nov so far - More rally ahead?
Foreign portfolio investors (FPIs) have made a dramatic comeback to Indian equities in November, turning into aggressive buyers after months of heavy selling. Their renewed appetite for domestic stocks has helped the Sensex and Nifty 50 extend their recovery, with market experts citing improving corporate earnings, attractive valuations, and a shift in global investment preferences as key drivers.
The latest monthly NSDL data on flows shows that FPIs have infused ₹84,291 crore into Indian equities in November so far, marking a sharp reversal from the selling seen in most months this year. In comparison, foreign investors were net sellers in January, March, April, May, June, September and October. March recorded the steepest outflow of ₹1.17 lakh crore, followed by April at ₹60,847 crore.
The turnaround began in November, with foreign buying gathering pace through the month. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said FPIs purchased equities worth ₹79,301 crore through 13 November, with buying becoming increasingly aggressive. He believes the trend could continue, potentially making November's inflows a record high.
According to Vijayakumar, a shift in global investment preferences has played an important role in bringing foreign capital back to India.
He attributed the change partly to the victory of the Democrats in the US Congressional elections, which triggered selling in AI stocks amid concerns over greater regulation of artificial intelligence and related spending. This encouraged a rotation towards non-AI investment opportunities, where India offers attractive prospects.
Improving corporate earnings have also strengthened the case for Indian equities. Vijayakumar said the September-quarter results indicate a meaningful recovery in earnings, with around 15% growth in Nifty 50 earnings appearing achievable in FY27. This earnings outlook is providing fundamental support to foreign inflows.
He also pointed to more reasonable valuations after the earlier correction. With valuations becoming fair and several large-cap stocks looking attractive, FPIs have used the opportunity to accumulate shares. Stability in the rupee has further boosted their confidence, he added.
The return of foreign investors has helped the Nifty 50 move back above the 25,000 mark, with buying concentrated in several key sectors.
Vijayakumar said financials, telecom, capital goods, pharmaceuticals and automobiles witnessed aggressive FPI buying, contributing to a sharp rally in stocks across these segments. Select power-related stocks also gained following strong quarterly results.
He added that short-covering in frontline large-cap stocks, particularly leading banking names, provided another boost to the benchmark indices.
However, the rally is not without potential hurdles. Sustained selling or profit-booking by domestic institutional investors (DIIs) could restrain further gains. Nevertheless, the sharp change in FPI sentiment suggests that the market may remain resilient, Vijayakumar said.
The latest market recovery has also seen buying interest spread beyond large-cap stocks, with mid- and small-cap shares joining the rally.
Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, said the Nifty 50 rose 0.5% to 25,144 during the week, while the Sensex gained 0.7% to 81,592, marking their third consecutive weekly advance. The gains moderated after the previous week's sharp 8.6% rally, while profit-booking and concerns over inflation and crude oil weighed on sentiment towards Friday.
However, market breadth improved significantly. The Nifty Smallcap index gained 3.6%, while the Midcap index advanced 2.1%, with PSU banks leading sectoral gains.
Gaur described this as a shift in the flow of foreign money from large-cap stocks towards the broader market. In his words, after buying the building, FPIs spent the week buying the furniture.
Gaur said investors will track several global and domestic triggers in the coming week.
The US Federal Reserve will remain in focus, with the FOMC minutes due on 18 November. With a December rate hike largely priced in, investors will watch the debate around the magnitude of any potential increase, along with commentary from Fed officials.
Crude oil prices and developments involving Iran and the Gulf region will also be important. Brent has fluctuated between $90 and $98 a barrel over the past two weeks, and any sharp move could influence the rupee and foreign investment flows.
On the domestic front, investors will monitor whether the rupee can hold around ₹94 against the US dollar and whether October's 6.09% retail inflation reading changes expectations for the RBI's December policy decision.
Gaur also highlighted the importance of market breadth and the remaining September-quarter earnings announcements. With mid- and small-cap stocks now participating in the recovery, earnings could help determine whether the rally broadens further.
For the Nifty 50, the 25,000 mark remains an important level to watch. A sustained hold above this threshold could help preserve the positive momentum, he said.
The unwinding of global AI-related trades is another factor that could continue to influence capital allocation towards Indian equities.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
Get Latest real-time updates
Catch all the Business News , Market News , Breaking News Events, JIO IPO Listing Today LIVE and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
HomeMarketsStock MarketsSensex, Nifty cheer as Bulls, FPIs back in Indian stock market; pump in over ₹84k cr in Nov so far - More rally ahead?
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.