Foreign investors pour nearly Rs 40,000 crore into Indian stocks in two weeks

Foreign institutional investors (FIIs) have added a net Rs 39,404 crore to Indian equities across 13 trading sessions since Oct. 16, according to recent data. The buying surge lifted the Sensex by roughly 2%, pushing it past 78,900, while the Nifty rose above 24,400.

Analysts at Nomura attribute the turnaround to a mix of falling Brent crude, which has slipped about 10% to around $94 a barrel, improving corporate earnings, and expectations that long-term capital gains tax for foreign investors could be reduced in the upcoming budget. "The strongest positive for the market is the sharp 10% fall in Brent crude to around $94 level," said Dr. V K Vijayakumar, chief investment strategist at Geojit Investments.

Nomura notes that normalized profit after tax for 134 companies in its BSE 200-plus universe grew 34% year-on-year in the second quarter of fiscal 2027, outpacing consensus estimates. Valuations remain below post-pandemic averages, with the Nifty trading near the lower end of its forward price-to-earnings range of 17-22 times.

Vijayakumar expects further short covering in large-cap stocks, especially banking and financial majors, but cautions that domestic institutional investors could sell into strength, creating profit-booking pressure. He also warned that the market’s momentum remains vulnerable to higher oil prices, global yield shifts, geopolitical uncertainty and technology-spending concerns.

"Trump being what he is, is likely to turn Mr Veto rather than a lame-duck president," Vijayakumar added, referring to potential political developments in Washington that could affect market sentiment.