FIIs remain net buyers in May, infuse Rs 18,082 crore into Indian equities

Synopsis

Foreign Institutional Investors (FIIs) have shown renewed confidence in Indian equities, becoming net buyers for the second consecutive month. May saw a net inflow of Rs 18,082 crore, following April's Rs 4,243 crore. This reversal follows heavy selling earlier in 2025, driven by global factors like a strong dollar. Improved macroeconomic indicators, slowing growth in the U.S.

Foreign Institutional Investors (FIIs) turned net buyers in Indian equities for the second consecutive month, with data up to May 30 showing a net inflow of Rs 18,082 crore through the exchanges, according to NSDL data.

This follows a net purchase of Rs 4,243 crore in April, marking a notable shift in sentiment after heavy selling in the earlier part of the year. The reversal in FII activity is one of the most significant shifts in India’s capital markets this quarter, especially after the aggressive outflows seen at the start of 2025.

In the first three months of 2025, FIIs had been consistent sellers in the Indian market. The selling began in January, coinciding with the dollar index peaking at 111 in mid-January.

That month alone, FIIs sold equities worth Rs 78,027 crore, driven by concerns over global interest rate movements and a stronger dollar. However, as global macroeconomic indicators began to ease, including signs of cooling inflation and reduced interest rate volatility in the U.S., the intensity of selling started to decline.

According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the global factors such as slowing growth in the U.S. and China, coupled with declining inflation and steady domestic macroeconomic indicators, have helped drive FII inflows into India.

“Global macros like declining dollar, slowing US and Chinese economies and domestic macros like high GDP growth and declining inflation and interest rates are the factors driving FII inflows into India,” Vijayakumar said.

The trend of positive FII flows signals renewed confidence in the Indian growth story, supported by relatively strong fundamentals and improving macroeconomic stability.

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