New Delhi, December 27 (IANS). Strong GDP growth rate and improvement in corporate earnings could lead to a major return of foreign institutional investors (FIIs) to the Indian market in 2026. This information was given by the analyst on Saturday.
FIIs have sold Rs 22,130 crore in December. At the same time, shares worth Rs 1,58,407 crore have been sold in the financial year 2025, which is the biggest sale by foreign investors in India.
However, analysts say that due to strong economic outlook and earnings clarity, there are signs of reduction in outflows of shares from foreign institutional investors.
“By the end of 2025, selling by foreign investors (FIIs) in India is on track to hit a new record,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
In 2024, FIIs sold shares worth about Rs 1,21,210 crore through exchanges. Although net FII inflows were positive for the year as they invested Rs 1,21,637 crore through the primary market, the net sale figure for 2025 is much larger.
He further said that persistent selling by FIIs has significantly contributed to the rupee’s sharp decline this year, and added that improving fundamentals are likely to attract net FII inflows in 2026.
Analysts said continued FII selling, coupled with higher trade deficit, significantly contributed to the rupee’s decline in 2025.
On the other hand, FDI (Foreign Direct Investment) in India is continuously increasing.
Net FDI into India almost doubled to $6.2 billion during April-October from $3.3 billion a year ago, an official statement said.
A recent report by Emkay Global Financial Services said rupee weakness may keep foreign investors away from the market and returns are expected only if the currency stabilizes for a long period (1-2 months).
The report said that foreign investors are still investing more in large-cap stocks and are overweight in the financial sector.
–IANS
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