On May 28, 2025, foreign institutional investors (FIIs) made a significant comeback to Indian equities, marking their biggest single-day purchase of the month. FIIs bought ₹4,662.92 crore worth of shares, driven by improving domestic indicators and a favourable monsoon outlook, which appears to have renewed foreign investor interest in the Indian market.
FIIs surge on May 28
According to provisional exchange data, FIIs made gross purchases of ₹16,278.50 crore in the cash market, while selling ₹11,615.58 crore, resulting in net buying of ₹4,662.92 crore.
DIIs follow suit
Domestic institutional investors (DIIs) were also active buyers. On the same day, they bought ₹17,643.97 crore worth of shares and sold ₹9,731.98 crore, leading to net purchases of ₹7,911.99 crore.
However, the exact extent to which the ITC block deal influenced these figures will only be clear once final data is released.
Over ₹20,000 crore inflows in two months
FIIs have pumped in over ₹20,000 crore into Indian equities over the past two months, with more than ₹16,000 crore coming in May alone. Experts say this marks the most aggressive buying since September 2024 and is the largest FII inflow seen in the past eight months.
The bullish sentiment is being driven by a combination of strong corporate earnings, a weakening US dollar, easing geopolitical tensions between India and Pakistan, and optimism over a potential trade agreement with the United States.
Cautious optimism
While the renewed FII interest has lifted investor sentiment, market analysts advise caution, pointing to several global uncertainties:
- The ongoing trade war between the US and China
- High volatility in crude oil prices
- Uncertainty over US Federal Reserve interest rate decisions
This surge has undoubtedly brought renewed energy to the markets, but for it to sustain, stable domestic policies, political clarity, and a balanced global environment will be critical. For now, the rally is driven by optimism — the coming months will reveal whether that optimism holds firm.
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