Mumbai, February 10: foreign institutional investors (FIIs) are making a notable comeback in the Indian stock market. Over the past nine trading sessions, FIIs have purchased shares worth more than $2 billion, contributing to a bullish trend in the market.
According to exchange data, on February 9 alone, foreign investors bought shares worth approximately ₹22.23 billion.
However, market experts caution against prematurely concluding that this investment will be sustained in the long term. They believe that continued foreign investment will depend on global trade stability, improvements in corporate profits, and a weaker dollar.
During this period, domestic institutional investors (DIIs) have also been actively buying in the market. In the last nine days, DIIs have acquired shares worth around ₹89.73 billion. Experts suggest that this indicates a significantly strengthened role of domestic investors in the Indian stock market.
Currently, the share of domestic investors in Nifty50 has surpassed that of foreign investors. This shift is attributed to consistent inflows into mutual fund SIPs, increased participation from retail investors, and regular investments from insurance and pension funds. Meanwhile, foreign investors have become more cautious due to global economic uncertainties, rising foreign interest rates, and a stronger dollar.
Himanshu Srivastava, Principal and Manager Research at Morningstar Investment Research India, stated that domestic investment provides long-term stability to the market, reducing reliance on foreign investment and cushioning the market during global crises. This makes the Indian stock market more robust and stable.
Analysts note that following recent declines, Indian stock prices have become more attractive compared to other Asian markets, rekindling interest from foreign investors. Additionally, clarity regarding trade agreements between India and the United States has bolstered investor confidence.
During this bullish phase, both Sensex and Nifty have recorded gains of over 3%. Meanwhile, BSE Midcap 150 surged by approximately 5.66%, and BSE Smallcap 250 saw an increase of about 6.3%.
Market experts believe that the Reserve Bank of India’s accommodative stance, improvements in GDP, positive earnings expectations from companies, and the stability of domestic investment are factors that could attract foreign investment to India.
According to a report by Motilal Oswal Securities, by the end of the December 2025 quarter, domestic institutions held approximately 24.8% of Nifty50, slightly surpassing foreign investors’ share of about 24.3%.
Analysts indicate that the share of foreign investors is at its lowest level in eight quarters, while the domestic capital base continues to strengthen. This shift is expected to be sustainable rather than temporary.
