Foreigners Buy $1.6 Billion in Indian Stocks, Biggest Daily Inflow in Nearly 6 Years

Key Facts

Foreign investors were net buyers of about $1.6 billion in Indian stocks on Thursday, November 5, their biggest daily purchases in nearly 6 years, Reuters reported. Purchases totaled 147.96 billion rupees, according to preliminary exchange data, the highest level since February 24, 2021. Purchases on that previous day had reached 287.39 billion rupees, but included a large deal driven by a controlling shareholder. The inflow came as Indian stocks rallied, oil prices retreated and global funds rebalanced their exposure to AI stocks. Reuters said the purchases were in Indian stocks, while its coverage did not establish that the same funds moved directly from technology stocks to India.

The inflow coincided with a clear shift away from the foreign selling that had dominated the market in previous months. Foreign investors sold a record $30 billion in Indian stocks through the end of October, Reuters reported. But they returned to buying in recent sessions, recording net purchases of 208.35 billion rupees, or $2.20 billion, over the previous five sessions. Thursday's session was preceded by 72.84 billion rupees in stock purchases on Wednesday, November 4, the biggest daily buying since October 2025. That puts Thursday's inflow within a series of returning funds after a period of pressure driven by high oil prices and growth concerns.

The Nifty 50 and Sensex indexes rose 2.4% on Thursday, closing at 24,536.6 and 79,310.01 points, respectively, Reuters reported. Their gains thus topped 8% over 6 sessions, their longest winning streak in a year. The rally helped narrow their lag behind peer emerging markets, although both indexes remained lower since the start of 2026, by 6.1% and 6.9%, respectively. The rupee also improved during the week, rising 0.5% through Thursday and reaching a two-week high of 94.32 against the dollar before settling at 94.4750. Reuters linked expected currency support to the return of foreign inflows and lower oil prices, after the rupee had remained under pressure for most of the year and relied on central bank intervention.

The investors' return came amid a sharp drop in US technology and AI stocks. The Nasdaq Composite fell 5.5% on Thursday, while the S&P 500 dropped 4.4% and the Dow Jones 3.4%, the Associated Press reported. The selloff was led by shares of companies involved in building AI data centers, while Reuters said the decline in AI-linked stocks prompted global funds to rebalance their exposure. Oil prices also fell sharply after the US midterm elections, an important factor for India as a major crude importer. Higher prices had raised concerns about India's economic outlook, while the market's relatively low exposure to AI stocks had earlier kept investors away.

Investor comments cited other factors supporting the appeal of the Indian market. “In our view, accelerating earnings, below-average valuations and low foreign ownership make India an attractive opportunity,” said a portfolio manager at Allianz Global Investors. A research official at Motilal Oswal linked improved sentiment to the US midterm election result, saying markets expect a more moderate approach to trade and tariffs. He also pointed to a weaker dollar and a decline in the 10-year US Treasury yield. These factors come as the Indian market seeks to make up for weaker performance than its emerging-market peers this year, amid the economy's sensitivity to oil costs.

Technology stocks' pressure spread to Asian markets in Friday's, November 6, session after the Wall Street selloff. Japan's Nikkei fell 6.0% to 57,434.77 points, while South Korea's Kospi dropped 6.0% to 5,059.69 points, the Associated Press reported. Reuters had noted that a continued shift by investors away from AI stocks could bring Indian stocks back into focus. It also expected India's losses on Friday to be relatively limited compared with Asian markets with heavier technology-stock exposure. Reuters said the Nasdaq fell 5.5% and the Philadelphia Semiconductor Index dropped more than 12% on Thursday, amid the selloff ahead of Asian trading.