Foreign institutional investors (FIIs) have injected ₹17,059.90 crore into Indian equities over the week ending April 25, 2025, reversing earlier outflows and fuelling a robust market rally, according to provisional data from the National Stock Exchange (NSE).
The renewed FII interest, coupled with domestic institutional investors (DIIs) adding ₹1,131.81 crore, has driven benchmark indices higher, with the Sensex and Nifty gaining 1.4-1.5% over the past five days.
This marks a sharp reversal from earlier in April, when FIIs were net sellers, offloading a massive ₹40,766.51 crore between April 1-14 amid global tariff uncertainties triggered by US President Donald Trump’s policies.
The FII turnaround could be attributed to several factors. A weakening US dollar, with the dollar index slipping to 99.5, its lowest in three years, has prompted capital flows into emerging markets like India. Additionally, easing concerns over US tariffs on China and optimism about India’s macroeconomic fundamentals, despite a revised IMF growth forecast of 6.2% for 2025, have bolstered investor confidence.
“India is relatively well-off, especially if some China or Vietnam exports get rerouted,” Harsh Gupta, Fund Manager of PIPE at Ionic Asset, told Reuters earlier this month while talking about the repercussions of Trump’s tariffs on the economies of Asian countries.
The Nifty 50 and Sensex climbed for seven consecutive sessions until April 24 (Thursday), supported by strong buying in IT, auto, and pharma stocks.
DIIs, while supportive, have been less aggressive, with net buying concentrated earlier in the month. Their largest single-day purchase this week was ₹12,122.45 crore on April 7, countering FII sales of ₹8,931.15 crore that day. However, DII activity tapered off in the latter half of the week, with net sales on April 22 and 23.
Market analysts remain cautiously optimistic. “Lower commodity prices and renewed FII buying are positive factors for the market. We remain neutral to slightly underweight on the IT sector, as uncertainty around tariffs and growth has been partially reflected in its recent underperformance. High-growth stocks experienced a sharp correction in early 2025, but market sentiment has since turned slightly more constructive toward these names,” Karthik Kumar, Fund Manager, Axis MF, told CNBC-TV18 on April 22.
