FPI Inflows Lift Sensex, Nifty to 10-Week High (2026)

Foreign flows turn positive after mid-June

Foreign portfolio investors (FPIs) swung back to net buying in Indian equities from the second half of June, reversing a sharp first-half selloff, according to NSDL data cited in the report. The change marked the first clear turn since the US-Iran conflict broke out in February and had weighed on risk sentiment. The comeback in overseas flows helped restore momentum across multiple domestic cyclical and consumption-linked pockets. Sectors including financial services, construction, consumer services, consumer durables, realty and health care saw improved foreign interest. The report also noted that selling pressure moderated in FMCG and IT, which had earlier faced heavier outflows.

June numbers show a sharp reversal

The scale of the change was visible in the month’s split data. In the second half of June, FPIs invested about ₹14,109 crore in Indian equities. That came after they pulled out nearly ₹63,450 crore in the first half of the same month. The contrast suggests that the second-half move was not incremental but a broad reversal in positioning. The data point is important because it coincided with an improvement in index-level momentum. It also came at a time when investors were watching how global geopolitical risk would feed into emerging market allocations.

July begins with continued buying

The buying did not stop with the month-end. The report said FPIs have bought Indian equities worth about ₹2,985 crore so far in July. It also noted that FPIs recorded net equity inflows for three consecutive weeks through July 3, described as the longest stretch of positive foreign flows in stocks since the onset of war in West Asia. While the report did not break down every day’s activity, the weekly streak suggests the shift was sustained rather than a single-session bounce.

Sensex and Nifty close at 10-week highs

Renewed foreign buying coincided with a strong close for Indian benchmarks. The Sensex rose 521 points (0.7%) to end at 78,285. The Nifty 50 gained 160 points (0.7%) to close at 24,430. Both finished at their highest closing levels in 10 weeks, according to the report. The move mattered because it came after a period where flows had been volatile and investors were looking for confirmation that risk appetite was returning.

Financial services leads the sector rotation

Sectoral data in the report showed the shift most clearly in financial services. In the second half of June, financial services attracted net foreign inflows of about ₹14,634 crore, compared with net outflows of ₹11,263 crore in the first half. Construction and consumer services followed with net inflows of about ₹3,484 crore and ₹3,081 crore, respectively. Both were reversals from outflows of ₹603 crore (construction) and ₹1,852 crore (consumer services) in the preceding fortnight. The pattern indicates that overseas investors moved back into sectors typically linked to domestic growth and credit cycles.

Daily snapshot: July 8 trading activity

A separate data line in the material provided showed an entry for 08-Jul-2026 with FII/FPI figures: Buy 16,260.75, Sell 14,895.63, and Net 1,365.12. Another note added that FIIs bought ₹1,963 crore in the cash market but sold -2,68,586 Nifty futures, described as profit-taking with downside cover. The same set of notes also said FII and DII added ₹2,753 crore together, and flagged an FII buying streak of 4 sessions with cumulative +₹3,954 crore. Taken together, these inputs point to net buying in equities even as derivatives positioning stayed cautious.

Key numbers at a glance

Market impact: why flows and positioning matter

Foreign flows often influence near-term index direction because they affect demand in high-weightage stocks, especially financials. In this case, the report linked renewed foreign buying with benchmarks reaching a 10-week closing high. The sector split adds context: the largest reversal occurred in financial services, which can quickly feed into index performance given its weight in large-cap indices. At the same time, the derivative positioning mentioned in the notes suggests that not all risk was taken outright, with some participants maintaining downside cover through Nifty futures. The net effect was supportive for prices without indicating one-way positioning across instruments.

What investors will track next

The report’s data points leave markets focused on whether the positive streak in foreign flows extends beyond early July. Investors will likely monitor whether sector inflows remain concentrated in financial services and other domestic cyclicals, or broaden further. Another watchpoint is the mix of cash and derivatives activity, given the cited combination of cash buying alongside Nifty futures selling. For market participants, confirming signals would include continued net equity inflows and sustained index closes near recent highs.

Conclusion

FPIs turned net buyers in the second half of June after heavy selling in early June, and the momentum carried into July with additional purchases. The shift was most visible in financial services and coincided with the Sensex and Nifty closing at their highest levels in 10 weeks. Near-term attention will remain on the consistency of foreign inflows through July and how cash-market buying aligns with hedging or profit-taking visible in index futures data.