Foreign investors pump ₹14,590 crores into equities in June, but July begins with pullback

Foreign investors put in ₹14,590 crores in the country's equity market in June, marking the third straight month of investment, supported by improving global liquidity conditions, easing geopolitical tensions, and a rate cut by the Reserve Bank of India (RBI).

However, foreign portfolio investors (FPIs) turned net sellers in July and pulled out ₹1,421 crores in the first week of the month, data with the depositories showed.

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Going forward, in the near term, FPI flows are expected to remain choppy on account of tariff deadline developments and US data volatility, explained Vaqarjaved Khan, Senior Fundamental Analyst, Angel One.

Also, FPIs buying will hinge on Q1FY26 result indications.

"If the results indicate earnings recovery, that will be positive. Disappointment on these factors can impact the market and, thereby, flows," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments.

According to the data with the depositories, FPIs made a net investment of ₹14,590 crores in equities in June.

This positive momentum follows a net investment of ₹19,860 crores in May and ₹4,223 crores in April. Prior to this, FPIs had pulled out ₹3,973 crores in March, ₹34,574 crores in February, and a substantial ₹78,027 crores in January.

With this, FPIs' outflow for 2025 stands at ₹79,322 crores so far.

"FPIs exhibited a cautious yet improving stance in June 2025, beginning the month with notable outflows from the equity markets driven by elevated US bond yields, trade tensions, overvalued Indian stocks and deteriorating geopolitical environment," explained Himanshu Srivastava, Associate Director, Manager Research at Morningstar Investment.

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However, sentiments shifted towards the later part of the month as global liquidity conditions improved, geopolitical tensions eased, the RBI cut rates, the rupee strengthened, and oil prices stabilised, he added.

In the second half of June, FPIs were buyers in financials, autos and auto components, and oil and gas sectors, while they turned sellers in capital goods and power.

On the other hand, FPIs pulled out ₹6,121 crores from the debt general limit and ₹6,366 crores from the debt voluntary retention route, during the period under review.

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