Daijiworld Media Network - Mumbai

Mumbai, Dec 21: Foreign institutional investors (FIIs) have net sold shares worth Rs 21,104 crore in December, but analysts note early signs of a turnaround in foreign inflows, driven by macroeconomic strength and robust corporate earnings.

In the last three trading days, FIIs emerged as buyers in the cash market, investing Rs 3,596 crore, aided by a stronger rupee. The currency rebounded from a low of 91.14 against the dollar on December 16 to 89.29 by December 19, helping temper selling pressure.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “As 2025 ends, there are indications of a reversal in FII outflows, with potential capital inflows expected in 2026. India’s steady GDP growth and improving corporate earnings make FIIs likely net buyers next year.”

Despite strong outflows through exchanges, totaling Rs 2,30,964 crore in CY25, FIIs continued investing in the primary market, with Rs 73,106 crore bought, including ?11,454 crore in November alone. Analysts noted that persistent selling and India’s high trade deficit contributed to the rupee’s 5% depreciation over the year, though the recent rebound points to stabilizing foreign interest.

The ongoing FY26 September quarter earnings season reflected broad-based strength, with sectors such as hospitals, capital goods, cement, electronics manufacturing services, ports, NBFCs, and telecom reporting double-digit growth in EBITDA and profits, further supporting investor confidence.