The Indian equity markets have witnessed a remarkable shift in October 2025, with Foreign Portfolio Investors (FPIs) pouring Rs 6,480 crore into Indian stocks after three consecutive months of net selling. This fresh wave of foreign investment signals renewed confidence in India’s macroeconomic fundamentals and market prospects.
After months of substantial outflows totaling over Rs 76,000 crore from July through September, the positive inflow this October reflects a narrowing valuation gap between India and other global markets. Experts point out that India’s relative underperformance during the past year has created new opportunities for investors to buy at attractive valuations. This renewed buying has helped benchmark indices such as the BSE Sensex and Nifty 50 reach new 52-week highs, further boosting investor sentiment.
Robust domestic consumption, easing inflation, and stable economic growth have contributed to this optimism. Market strategists also highlight improving global liquidity conditions and steps by the Reserve Bank of India to maintain accommodative monetary policy as key supportive factors. Additionally, moderation in US-India trade tensions has made Indian equities comparatively more appealing on the global stage.
Sector-wise, real estate, automotive, financial services, FMCG, infrastructure, and consumer sectors have led the gains, reflecting broad-based recovery across the economy.
Despite the positive inflows in October, FPIs have net withdrawn around Rs 1.5 lakh crore during 2025 so far, indicating the significance of this turnaround. Market watchers anticipate that ongoing corporate earnings and global trade developments will steer the direction of FPI flows in the coming months.
This resurgence of foreign investment comes at a crucial time, as India Inc’s earnings outlook improves amid GST cuts and a favorable interest rate environment expected to boost corporate profitability by FY27.
In summary, the Rs 6,480 crore investment influx by foreign investors this October underscores a fresh wave of confidence in Indian equities, supported by solid macroeconomic tailwinds and an improving global risk appetite. The market rally and strong sectoral performances suggest a potentially robust medium-term outlook for India’s capital markets.
