FIIs Stage Strong Rebound as Geopolitical Calm Ignites Market; Consumer Services Lead Sectoral Inflows

FIIs Stage Strong Rebound as Geopolitical Calm Ignites Market; Consumer Services Lead Sectoral Inflows​

Foreign portfolio investors (FPIs) registered a robust net buying performance across sectors in the first half of July, marking a strong comeback for overseas capital. NSDL data indicates that this inflow marks a second consecutive fortnight of sustained purchases and represents the strongest such purchase since early February.

The trend is fueled partly by eased geopolitical concerns following the Middle East ceasefire, which contributed to a decline in energy prices. Pankaj Pandey, head of fundamental research at ICICI Direct, noted that foreign investors have turned buyers directly after these calming market developments.

Consumer Services Drive Sectoral Gains​

Consumer services emerged as the primary driver of sectoral inflows during this period. This category, which includes sectors like e-commerce and hotels, attracted significant foreign buying attention. Following closely were metals and mining, alongside healthcare stocks that also saw steady flows from FPIs.

Of the 24 tracked segments, a total of 15 recorded favorable flows, while eight sectors experienced outflows. The data underscores a clear sectoral rotation in investor sentiment this fortnight.

IT Stocks Register Comeback After Months of Heavy Outflows​

The information technology (IT) sector, which had faced months of consistent selling pressure, saw FPIs return as marginal buyers. This shift suggests that the sector may have bottomed out, according to Apurva Sheth, head of research at Samco Securities.

In this period, IT stocks were purchased for ₹60 crore. This contrasts sharply with previous trends, as these shares had seen over ₹34,000 crore pulled out by FPIs between 2026 and June, representing the second-highest outflow after banking.

Banking Sector Rebounds Amid Market Shifts​

The financial sector also demonstrated signs of recovery during the first half of July. Banks received flows worth ₹1,975 crore in this period, showing an improvement from the ₹3,371 crore inflows recorded in June. However, FPIs have sold bank shares worth over ₹1 lakh crore so far in 2026.

Metal and Mining Seen as Structural Opportunities​

Metals and mining remain a critical focus area for long-term structural themes despite recent underperformance. The strong buying seen in these stocks was described as a surprise given their prior struggles.

The overall FPI net investment stood at ₹15,560 crore across all sectors during the period spanning July 1st to 15th. This figure follows a significant inflow of over ₹14,000 crore recorded by foreign investors in the second half of June.