FIIs Pour Around ₹40,000 Crore Into Indian Stocks In 13 Sessions; Can Lower Oil And Strong Earnings Keep Nifty Bulls In Control?

Foreign institutional investors (FIIs) have returned to Indian equities after months of heavy selling. Net purchases reached ₹39,404 crore over 13 trading sessions since 16 October 2026. This followed a period when foreign ownership of Indian stocks fell to historic lows after substantial outflows.

The FII buying momentum gathered pace on 05 November 2026. The Sensex advanced 2%, gaining more than 1,600 points to cross 78,900, while the Nifty moved above 24,400.

The rally followed a 3% overnight rise in the Dow Jones Industrial Average after the US midterm elections. At 3:20 pm on Thursday, Sensex stood at 79,220.55, up 1,919.15 points, or 2.48%. Nifty 50 stood at 24,550.70, up 590.10 points or 2.46%.

Crude Prices And Earnings Support FII Buying

Brent crude prices had declined around 10% to approximately $94 per barrel. The decline was seen as a major positive for Indian equities. Lower oil prices could reduce pressure on inflation, the import bill and the current account. Hopes of progress towards resolving the US-Iran conflict also supported sentiment.

Corporate earnings have provided another reason for foreign investors to reconsider Indian stocks. Normalised profit after tax (PAT) for 134 companies in its BSE 200-plus universe grew 34% year-on-year (YoY) in Q2 FY27, exceeding consensus estimates by 18%. Excluding oil and gas, profit growth was 29%, still 5% above expectations. Power, coal, metals, infrastructure and pharmaceutical companies reported better-than-expected earnings.

Valuations And LTCG Tax Hopes Affect Sentiment

The valuations across most sectors had fallen below their post-pandemic averages. The Nifty was trading near the lower end of its post-pandemic forward price-to-earnings range of 17-22 times. Indian equities had also gained 6% in dollar terms since 08 October 2026, outperforming several major markets.

Expectations of a possible LTCG tax exemption for foreign investors in the upcoming Budget have added to optimism. This possibility has also been identified as a factor supporting portfolio flows. Further short-covering in large-cap stocks is expected, particularly banking and financial companies.

Is The FII Reversal Sustainable?

The earlier selling remains significant. FIIs sold roughly $5 billion in the two weeks ended 15 October 2026. Meanwhile, net outflows since 15 September 2026 have reached about $8.8 billion. Analysts cautioned that renewed buying remained exposed to elevated oil prices, global yields, geopolitical uncertainty and concerns over technology spending.

Domestic institutional investors could also book profits as markets rise. Therefore, the recent inflows signal improving sentiment, but do not yet establish a lasting return of foreign capital.

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