From sellers to buyers: FIIs pump nearly ₹8,000 crore into Indian stocks in October; here is why

Foreign institutional investors (FII) have turned net buyers in Indian equity markets for the first time in three months in October. According to data compiled by the National Securities Depository Limited (NSDL), FIIs have bought shares worth ₹7,896 crore in October so far. The buying by FIIs comes after they sold shares worth ₹76,619 crore from July to September.

Overseas investors are buying Indian shares at a time when the benchmarks NIFTY50 and SENSEX are logging solid gains.

Both the headline indices hit their respective 52-week highs on Thursday, October 23, data from stock exchanges showed. In October so far, SENSEX surged as much as 6.25%, while the NIFTY50 index of the NSE has climbed 6.07%.

Better-than-anticipated second-quarter earnings by Indian corporates and expectations of a trade deal between India and the United States are leading to a surge in markets and attracting FII investment after persistent selling, analysts said.

Strong start to Q2 earnings

India's most valuable company – Reliance Industries – earlier this month reported a consolidated net profit of ₹18,165 crore in the second quarter of the current financial year, marking an increase of 10% from ₹16,563 crore in the same period last year.

Billionaire Mukesh Ambani-backed company’s revenue from operations jumped 10% to ₹2,58,898 crore in the July-September period from ₹2,35,481 crore in the year-ago period.

The company on a consolidated basis reported a strong operational performance, as its operating profit, also known as EBITDA (earnings before interest, tax, depreciation and amortisation), jumped 18% to ₹45,885 crore and its operating profit margin expanded by 120 basis points to 18%.

Meanwhile, the current rally is also being supported by gains in banking shares after banks reported strong July-September quarter earnings.

HDFC Bank, the country's largest private sector lender, earlier this month reported an 18% YoY jump in the net profit for the Q2FY26 quarter.

During Q2FY26, the bank's net interest income steadily grew by 0.4% QoQ and 4.8% YoY at ₹31,500 crore, while the non-interest income slumped sharply by 34% sequentially at ₹114 crore.

On the balance sheet front, the average advances for the quarter jumped 9% YoY to ₹27.9 lakh crore, while the average deposits grew by 15.1% YoY to ₹27.1 lakh crore. The growth in advances was primarily driven by mid-small market lending at 19.4%, followed by retail and corporate sector growth at 7.4% and 6.4%, respectively.

The measure of banking stocks on the NSE – NIFTY Bank index – in October surged as much as 7.21% to hit an all-time high of 58,577.50.

US-India trade deal hopes

Meanwhile, expectations of a trade deal between India and the United States amid reports that the US and China could reach an agreement also aided positive sentiment for FIIs, analysts noted.

“On the global front, if Donald Trump manages to reach a trade agreement with China, and subsequently with India, that could further boost sentiment. India’s recent move to reduce its purchases of Russian oil signals its willingness to align on trade terms. Domestically, strong online sales during the festive season also reflect healthy consumer demand trends,” said Vijay Chopra, MD of Enoch Ventures, a Delhi-based financial services firm.

“Fundamentally, things are changing for the better. The results season so far has been encouraging—particularly for IT companies. Even where earnings haven’t been strong, they haven’t been disappointing either. HCL Technologies, for instance, surprised positively in the second quarter,” he added.

The return of FIIs as net buyers in October marks a crucial turning point for Indian equities after a quarter of sustained selling. Strong corporate earnings, upbeat macro indicators and renewed optimism around global trade dynamics have reinforced investor confidence, analysts added.