FPIs Turn Net Buyers in Second Half of October, Data Shows

Technology-Led FPI Buying Offers Relief, Not a Full Reversal

Foreign investors returned to Indian equities late in October, but the rebound was concentrated in two sectors and did not erase the month’s outflows.

A late-month rebound follows heavy early selling

Foreign portfolio investors bought shares worth ₹13,112 crore in the second half of October after selling nearly ₹47,955 crore in the first fortnight, NSDL data showed. The buying marked a change in direction within the month, but not a reversal of the overall trend.

For October as a whole, FPIs recorded equity outflows of ₹34,843 crore. That was slightly lower than the ₹35,861 crore of outflows in September, but still reflected a net withdrawal of foreign money from Indian shares. The second-half inflow therefore eased the month’s tally without turning it positive.

The distinction matters for investors assessing whether overseas sentiment has materially improved. A strong fortnight can influence market mood, but the full-month figure and the distribution of flows provide a broader view of foreign positioning.

Telecom and IT accounted for most of the buying

Telecommunication stocks attracted ₹11,065 crore of FPI buying during October 16-31, while IT stocks received ₹10,915 crore. Together, these two sectors drew ₹21,980 crore—substantially more than the overall net inflow of ₹13,112 crore.

That gap illustrates how purchases in a small number of sectors were offset by selling elsewhere. Services, media, entertainment and publication, and the ‘Others’ category also recorded net inflows, ranging from ₹140 crore to ₹658 crore, but these were far smaller than the telecom and IT allocations.

The pattern suggests that foreign investors were choosing specific areas rather than increasing exposure across the market. For investors, sector-level flows can help explain where overseas demand was concentrated, but they do not by themselves establish a durable change in sentiment or indicate future performance.

Outflows remained widespread across sectors

Only five of the 24 sectors recorded net inflows in the second half of October, while 18 saw outflows. FMCG stocks faced the largest selling pressure, with FPIs offloading ₹1,559 crore. Automobiles and auto components followed with outflows of ₹1,098 crore, while oil, gas and consumable fuels saw sales worth ₹970 crore.

Financial services also remained in net outflow territory, though selling moderated to ₹883 crore in the second half. The sector had seen ₹8,634 crore of foreign selling in the first half. The slower pace is a notable shift, but the continued outflow means the data does not yet show a return to net buying in financial stocks.

Samco Securities research analyst Raj Gaikar described the technology-focused inflows as selective sectoral repositioning, adding that buying would need to broaden beyond two sectors to signal a stronger return. The breadth of flows is therefore an important measure to watch alongside the headline net-investment figure.

Key Highlights

• FPIs invested ₹13,112 crore in Indian equities during October 16-31.
• Telecom and IT attracted ₹11,065 crore and ₹10,915 crore, respectively.
• Only five of 24 sectors recorded net inflows; 18 saw outflows.
• FMCG, auto-related stocks, and oil and gas were among the sectors facing selling.
• Despite late-month buying, October ended with net equity outflows of ₹34,843 crore.

Investor Note: The late-October inflow is a positive change in direction, but its concentration in IT and telecom and the month’s net outflow argue against treating it as a broad-based foreign buying signal. Investors may track whether inflows widen across sectors before drawing conclusions about a sustained shift in FPI sentiment.