Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | SEBI Registered MF Distributor | ARN-0158
FPIs Turn Net Buyers in the Second Half of October, Signalling Improving Sentiment: FPIs recorded net equity inflows of ₹13,112 Cr during October 16–31, marking a positive reversal from heavy selling of ₹47,955 Cr in the first half. This recovery helped moderate overall October net equity outflows to ₹34,843 Cr, compared with ₹35,861 Cr in September. Although October marked the second consecutive month of net selling and the seventh selling month in CY2026, against three months of net buying — February, July and August, the return of foreign buying in the second half indicates improving investor sentiment and early signs of renewed foreign interest in Indian equities.
Secondary Market Selling Remains Heavy, While Primary Market Attracts Foreign Capital: October’s equity outflows were driven by substantial selling in the secondary market, where FPIs withdrew ₹48,082 Cr. In contrast, FPIs remained net buyers of ₹13,239 Cr in the primary market, reflecting continued participation in IPOs and new issuances. Strong primary market inflows partially offset secondary market withdrawals, indicating that foreign investors remained selective in their equity allocations rather than withdrawing uniformly across the market.
FPI Debt Flows Turn Positive After Two Consecutive Months of Selling: FPIs recorded net debt inflows of ₹691 Cr in October, reversing the selling trend observed in August and September, when outflows stood at ₹1,457 Cr and ₹20,727 Cr, respectively. Debt investments were positive at ₹2,067 Cr during October 1–15, before witnessing outflows of ₹1,376 Cr in the second half. Segment-wise, the Debt-General Limit attracted ₹7,336 Cr, while Debt-VRR recorded inflows of ₹341 Cr. However, Debt-FAR witnessed significant selling of ₹6,986 Cr, largely offsetting the inflows in other debt segments.
IT Emerges as the Largest FPI Buying Sector: The IT sector attracted the highest FPI inflows of ₹13,514 Cr in October, with buying accelerating sharply from ₹2,599 Cr in the first half to ₹10,915 Cr in the second half. Telecommunication emerged as the second-largest buying sector at ₹7,137 Cr, reversing first-half selling of ₹3,928 Cr with substantial second-half purchases of ₹11,065 Cr. The strong inflows into IT and Telecom highlight a selective shift in foreign investor preference towards technology and communication sectors.
FMCG and Financial Services Face the Heaviest FPI Selling: FMCG emerged as the largest FPI selling sector in October, recording outflows of ₹9,731 Cr, compared with ₹3,001 Cr in September. Financial Services followed closely with selling of ₹9,517 Cr, extending September’s substantial outflows of ₹13,147 Cr. Selling was concentrated in the first half, with FMCG witnessing withdrawals of ₹8,172 Cr and Financial Services ₹8,634 Cr, reflecting continued foreign investor caution towards consumption-related and financial stocks.
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