FIIs become buyers in February with equity inflows worth Rs 16,912 crore. Is this a sign of trend reversal?

Foreign institutional investors (FIIs) have turned net buyers in February, purchasing shares worth Rs 16,912 in the domestic markets so far. The trend reversal is due to the improved profit figures for the third quarter.Buying returned this month after a lackluster start to the new year. In January, foreign equity outflows stood at Rs 35,962 crore, with net outflows of Rs 19,050 crore on an annualized basis.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, sees a clear trend reversal in FPI flows in February. “FPIs were buyers on nine of the last 16 trading days in February through February 20. As per NSDL data, the total FPI investment through exchanges in February through 20 was Rs 1,4177.66 crores. Moreover, FPIs had invested Rs 2,733.89 crores through the primary market, taking the total investment in February through 20 February to Rs 16,911.55 crores,” he said. said. He also points out the wide sectoral variations we have seen over the past month so far. Although FPIs sold a lot of IT stocks due to the anthropic shock, they were buyers of financial services and capital goods.

FPI Outlook

On the prospects, Vijayakumar said the trend of FPI buying is likely to continue in the future. A key factor driving the FPI inflows could be the improvement in corporate profits, he said, adding that the Q3 26 results indicate a marked recovery in corporate profits with an earnings growth of 14.7%.

“This trend is likely to continue in the rest of FY26 as well. Initial estimates suggest that FY27 earnings growth is likely to be around 15%. This will make Indian valuations fair and attractive for FPIs to become buyers in India,” the Geojit analyst said.

In 2025, the FIIs purchasing trends remained patchy but the overall trend was bearish. They withdrew Rs 1,66,286 crore from Indian markets as trade deal delays and premium valuations weighed on sentiment.

The FIIs were net sellers in December, selling domestic equities worth Rs 22,611.

FIIs sold shares worth Rs 11,766 crore in the third quarter after selling shares worth Rs 76,619 crore in the third quarter of CY25.

Also read: F&O Talk | What does the current long-short ratio reveal about FII positioning? Sudeep Shah on Ola, Newgen, 4 more top weekly movers

The April-June period of 2025 saw inflows totaling Rs 38,673 crore; Meanwhile, massive sales to the tune of Rs 1,16,574 crore took place during the January-March quarter.

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