Foreign Portfolio Investors recorded strong buying activity in Indian equities during the first half of February, investing around Rs 33,487 crore across 15 sectors. This marked the highest fortnightly inflow since the second half of April 2025 and signalled renewed global investor confidence in domestic markets.
Capital goods emerged as the biggest beneficiary, attracting Rs 8,032 crore between February 1 and February 15. This represented a sharp rise compared to January, when the sector received Rs 2,761 crore in investments. Analysts linked the improved sentiment partly to the government’s Rs 4,470 crore stake sale in Bharat Heavy Electricals Limited, which supported liquidity and strengthened investor confidence in the segment. Market experts observed that capital goods had underperformed in previous months, prompting value buying when no adverse signals emerged from the Union Budget.
Financial services also witnessed a notable turnaround. The sector recorded inflows of Rs 6,175 crore in the first half of February after experiencing outflows of Rs 8,592 crore in January. Strong third quarter earnings reported by major banks and non banking financial companies are believed to have boosted investor sentiment. Analysts, however, cautioned that valuations in certain segments remain relatively elevated, suggesting that investors may remain selective going forward.
Oil and gas stocks were among the other key recipients of foreign investment. Improved global commodity stability and expectations of steady domestic demand contributed to the positive outlook for the sector. Additionally, sentiment improved following the announcement of a proposed trade framework between India and the United States, which encouraged investment in sectors linked to manufacturing and the broader real economy, including textiles and gems and jewellery.
Despite the broad based inflows, the information technology sector continued to face selling pressure. Analysts indicated that global macroeconomic concerns and uncertainty around demand in key export markets may have weighed on technology stocks. While domestic sectors linked to infrastructure and banking saw renewed interest, IT companies did not benefit from the same level of optimism.
Market participants noted that the rebound in FPI inflows reflects confidence in India’s economic growth prospects, policy stability, and corporate earnings performance. The absence of negative surprises in the Union Budget and improving macro indicators supported the buying trend. Furthermore, expectations of stable interest rates and resilient domestic demand contributed to a favourable investment environment.
However, experts advised caution, highlighting that global market volatility and external economic risks could influence future flows. Sustained inflows will likely depend on continued earnings growth, stable policy measures, and clarity on global trade developments.
In conclusion, the first half of February witnessed a significant return of foreign portfolio investment into Indian equities, led by capital goods and financial services. While certain sectors such as information technology remain under pressure, the overall trend reflects renewed global confidence in India’s market fundamentals.
