FIIs infused ₹17,425 crore into domestic stocks last week; total outflows stand at ₹5,678 crore so far in April

This came following a net investment of ₹8,500 crore in the preceding holiday-truncated week ended April 18.

Globally, steady performances in major markets, expectations of a pause in the US Federal Reserve's rate hikes, and a stable US dollar boosted risk appetite for emerging markets like India. Easing global trade tensions further lifted investor sentiment, Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, said.

Domestically, India's resilient growth outlook, moderating inflation, and an optimistic forecast of an above-normal monsoon for 2025 enhanced confidence in the market. Together, these factors created an attractive investment environment for foreign investors, he added.

According to the data from the depositories, foreign portfolio investors (FPIs) made a net investment of ₹17,425 crore in equities during April 21 to April 25.

Overall, FPIs pulled out ₹5,678 crore from equities in April so far, taking the total outflow to ₹1.22 lakh crore since the beginning of 2025, data showed.

The initial part of the month was marked by aggressive FPI selling, driven largely by global uncertainties stemming from the US tariff policy developments.

This reversal in FPI activity happened at a time of heightened tensions between India and Pakistan following the Pahalgam terror attacks.

This renewed interest in FPI activity, according to analysts, has been caused by two important factors. One is the decline in the US dollar.

On April 21, the US dollar slumped to a three-year low as investors worried about President Donald Trump's threats to curtail the independence of the US central bank.

The US Dollar Index (DXY) slid as low as 97.92, its lowest level since March 2022. "The dollar index has declined about 5% since early April, when President Trump shook global financial markets with his unveiling of sweeping tariffs on nearly every country," news reports added.

The second factor is that the likely steep decline in US growth this year will impact corporate earnings in the US. In comparison, the Indian economy is expected to continue to remain resilient with growth above 6%, aided by recovery in corporate earnings.

In a recent interaction with Upstox, Rahul Singh, CIO – Equities, Tata Asset Management, said that a recovery in earnings is likely over the next one to two quarters, supported by a combination of macroeconomic tailwinds.