Foreign Institutional Investors (FIIs) made a strong comeback in Indian markets during the week ending June 27, 2025, with the final day alone recording net purchases of $1,241.08 million, marking a significant turnaround from their earlier cautious approach this month.

The weekly data from NSDL showed Friday’s total net investment of ₹10,642.60 crore, representing the strongest single-day inflow during the five-day period. The week showed considerable volatility with alternating days of inflows and outflows before ending on a positive note.

“FIIs turned strong net buyers in the Indian equity markets during the week, marking a notable reversal from their cautious stance earlier in the month,” said Himanshu Srivastava, Associate Director - Manager Research at Morningstar Investment. “The resurgence in flows was driven by improved global risk sentiment, a strengthening rupee, and easing crude oil prices, which bolstered investor confidence in emerging markets like India.”

Equity markets dominated Friday’s inflows, with FPIs investing $1,243.46 million in equities, equivalent to ₹10,662.98 crore. The week started strong with equity inflows of $1,093.55 million on Monday (₹9,471.58 crore), before turning negative on Tuesday with outflows of $211.53 million (₹1,836.29 crore) and Wednesday’s larger outflows of $503.64 million (₹4,336.58 crore). Thursday saw outflows of $99.47 million (₹854.15 crore) before Friday’s robust recovery.

Note: Figures in parentheses indicate net outflows

Note: Figures in parentheses indicate net outflows

The debt segment showed mixed performance across different categories throughout the week. Debt-FAR (Fully Accessible Route) bonds attracted $304.93 million on Monday but saw outflows on other days, ending Friday with inflows of $56.15 million. Debt-VRR (Voluntary Retention Route) bonds experienced significant volatility, recording outflows of $153.11 million on Monday before recovering to inflows of $49.43 million on Wednesday and $12.83 million on Thursday, but turning negative again on Friday with outflows of $12.75 million.

“Additionally, continued optimism around India’s economic growth supported this uptick,” Srivastava noted, highlighting the fundamental factors driving foreign investment decisions.

Mutual fund investments remained modest throughout the week. Friday recorded the lowest net investment at negative $4.33 million (₹37.11 crore outflow), while Wednesday saw the highest at negative $19.37 million (₹166.82 crore outflow). Equity-oriented mutual fund schemes received inflows on most days, while debt schemes saw significant redemptions.

The derivatives market witnessed substantial activity with index options leading the trading volumes. On Friday, index options recorded buy orders worth ₹59,981.86 crore against sell orders of ₹59,685 crore, with open interest of ₹2,667.44 crore. Stock futures maintained healthy volumes with Friday’s buy orders at ₹550.10 crore.

“FIIs exhibited a cautious yet improving stance in June 2025, beginning the month with notable outflows from the equity markets driven by elevated US bond yields, trade tensions, overvalued Indian stocks and deteriorating geopolitical environment,” Srivastava explained the broader monthly context.

The improvement in sentiment came as global conditions became more favourable. “However, sentiment shifted towards the later part of the month as global liquidity conditions improved, geopolitical tensions eased, the RBI cut rates, the rupee strengthened, and oil prices stabilised,” he added.

Currency and commodity derivatives showed varied patterns, with currency futures maintaining buy orders of ₹17.21 crore on Friday against sell orders of ₹9.63 crore. Commodity options recorded buy orders of ₹76.87 crore against sell orders of ₹79.14 crore.

“Overall, so far in June, FIIs are net buyers to the tune of $1.03 billion, underscoring the improved risk appetite of investors on global cues and their renewed confidence in India’s macro story,” Srivastava concluded.

The week ahead brings crucial economic data releases from both India and the United States, including Industrial Production numbers, PMI data, and employment figures from Bajaj Broking’s outlook, which are likely to influence FPI flows in the coming sessions.

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Published on June 28, 2025