FPI turn net buyers of $2.10 Billion in Indian equities in July 2026

JULY 2026 SHOWS SIGNS OF FPI FLOW TURNAROUND

It looks like a response to improving global geopolitical situation. FPIs were net buyers in Indian equities to the tune of $2.10 billion in July, after net selling $(5.21) billion in June. Out of the 23 sectors, 13 sectors saw net buying, and 10 sectors saw net selling in July. Net buying was dominated by Consumer Services, Healthcare, and Consumer Durables; while Capital Goods, Telecom, and Autos dominated the selling. The positive takeaway in FY27 has been the inflows into debt (thanks to a regulatory boost). For the 4 months of FY27; FPIs sold equities worth $(27.16) billion but bought bonds worth $8.57 billion.

Data Source: NSDL

PUTTING THE JULY 2026 FPI BUYING IN PERSPECTIVE

• From a longer-term perspective, the FPI net selling of $62 billion since Sep-24, has resulted in the FPI equity AUC falling -20.8% from $931 billion to $737 billion. Overall FPI AUC (including debt) fell -18.8% from $1,007 billion to $818 billion in this period.

• Market sentiments were robust in the first fortnight but turned tepid in the second half as Brent Crude scaled closer to $100/bbl. However, the surge in FCNR(B) deposit flows through the RBI special window has kept the FPIs enthused on India.

• FPI flows into debt in July 2026 stood at $2.0 billion adding to the $2.1 billion of inflows in equity. Debt flows crossed $8.5 billion in FY27, thanks largely to the FPI tax exemptions on interest and long-term capital gains on government bonds.

SECTORAL COLOUR OF FPI FLOWS IN JULY 2026

Sectoral FPI flow patterns gravitated towards the relatively defensive sectors.

• At $1.06 billion, FPI buying in consumer services stood out. FPI buying in hospitality, retail, and QSR was quite prominent due to the domestic nature of demand.

• Healthcare saw net buying of $809 million; both as a defensive play and also due to the large swathe of drugs going off patent in the next five years globally.

• Consumer Durables saw net buying $768 million on consumer facing edge, but the demand was more towards the contract manufacturing plays.

• As the situation in the Middle East remained sticky; commodity stocks in metals and cement saw FPI buying of $766 million on robust demand expectations.

• In terms of FPI selling, it was prominent in capital goods and power seeing combined net selling of $(954) million on expected delays in the capital cycle revival.

• In July 2026; telecom and autos also saw combined net selling of $(1.07) billion as they are facing issues with high leverage, pricing pressures, and rate uncertainty.

• The newsy sector for the month was IT with $350 million of net buying. It was not just defensive, but also emerged as a counterplay to AI exposure for FPIs.

It remains to be seen if FCNR(B) flows can revive confidence in INR, and Indian equities.