India sees record FPI inflow
Analysis based on 7 articles · First reported Mar 01, 2026 · Last updated Mar 01, 2026
The significant inflow of Foreign portfolio investment into India's equity markets in February 2026 is a positive signal, indicating renewed investor confidence and potentially leading to further market gains. However, the previous months of heavy selling by Foreign portfolio investment and ongoing global uncertainties, such as the Middle East conflict, suggest that future flows could remain cautious, impacting crude oil prices and currency movements.
Foreign portfolio investment (FPIs) injected Rs 22,615 crore into Indian equities in February 2026, marking the highest monthly inflow in 17 months. This rebound followed three consecutive months of heavy selling, during which FPIs withdrew a net Rs 1.66 lakh crore in 2025. The renewed confidence is attributed to several factors, including an interim trade agreement between India and the United States, a correction in India's market valuations, and strong third-quarter corporate earnings, which grew 14.7 percent. Additionally, India's conclusion of multiple free trade agreements with entities like the European Union and United Kingdom contributed to improved investor sentiment. Sectorally, FPIs were aggressive buyers in financial services and capital goods stocks, while continuing to reduce their exposure to information technology companies due to concerns over artificial intelligence-led disruption. Analysts expect March inflows to remain positive, with upcoming Q4 earnings and rupee stability below Rs 91 against the dollar being crucial factors. However, global factors such as the Middle East conflict and its potential impact on crude oil prices and currency movements remain key monitorables.
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