FPIs Pump Billions Into India for Third Straight Month—What’s Driving This Bull Run?

Foreign portfolio investors (FPIs) are on track to become net buyers in Indian stock markets for the third consecutive month in June 2025, extending a strong rebound in investor sentiment that has fueled this year’s rally.

After being net sellers in January, February, and March, FPIs turned buyers starting in April. According to the National Securities Depository Limited (NSDL), FPIs have bought Indian equities worth ₹8,915 crore so far in June. This follows net buying of ₹4,223 crore in April and a massive ₹19,860 crore in May.

Market experts say the surge in FPI flows has been a key driver of the latest stock market rally, lifting benchmark indices from steep corrections earlier this year.

He added that FPIs have focused their buying in sectors like financials, capital goods, and real estate, while trimming positions in FMCG, consumer durables, and IT. Their sustained buying has boosted large-cap stocks, pushing the Nifty and Sensex to new 2025 highs. However, experts warn that high valuations could trigger profit booking in the near term.

Despite the strong equity inflows, FPIs have continued selling in the bond market, a trend expected to persist given the narrower yield differential between US and Indian bonds. The Sensex remains about 2,000 points below its all-time high of 85,978, having earlier corrected nearly 13,000 points. FPI buying has helped stabilize indices and reignited investor optimism.

Adding to the positive backdrop, India’s inflation data has remained comfortable, while volatility in global markets continues due to fears of new US reciprocal tariffs as the July 9 deadline approaches.

Indian stock markets have outperformed many global peers in recent weeks, thanks to strong foreign inflows, ample liquidity, and steady domestic fundamentals. In the last three years, the Sensex and Nifty have delivered impressive cumulative returns: about 9–10% in 2024, 16–17% in 2023, and 3% in 2022. Analysts say that while FPIs have been a big part of this year’s rally, maintaining momentum will depend on earnings growth, macro stability, and global risk appetite.


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