FIIs remain net buyers for second straight month in August, here's what analysts say
Analysts attribute resilient economic activity, a stable rupee, and easing geopolitical concerns in West Asia as key factors leading to inflows of foreign capital into the Indian market.
- Aug 31, 2026,
- Updated Aug 31, 2026 1:34 PM IST
Foreign institutional investors (FIIs) have remained net buyers in August 2026 for the second straight month. They infused Rs 30,919 crore into Indian equities this month. This follows Rs 20,200 crore invested in July this year. Analysts attribute resilient economic activity, a stable rupee, and easing geopolitical concerns in West Asia as key factors leading to inflows of foreign capital into the Indian market.
V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, "The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and more importantly the improving earnings growth in India. A significant trend in FPI investment in India recently is the direction of flows towards the SMIDs (mid-and small-caps.) Growth and earnings momentum are much higher in the SMIDs compared to the large-caps. This trend of FPI investment in SMIDs is likely to continue.”
Earlier, FIIs sold equities worth Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April, and a massive 1.17 lakh crore in March 2026. Before the selling streak, FIIs invested Rs 22,615 crore in February, according to Central Depository Services Ltd (CDSL) data.
On the recent outperformance of midcaps and small caps, Dinshaw Irani, MD & CEO, Helios India said, "Once again, the mid and small caps recorded far greater growth in earnings as compared to the large caps. The same was reflected in the respective indices, with Nifty SmallCap 250 beating the Nifty Midcap 150, which in turn beat the Nifty 50. We expect a similar trend to continue as we believe the earnings growth of the mid and small caps universe will maintain the outperformance vis-à-vis the large caps universe. This is due to the large caps universe cohort consisting of low-growth industries like IT, FMCG, large banks, etc., while the mid and small cap universe consists of new-age companies/industries. Choosing to invest in large vs mid/small caps is akin to investing in history vs the future."
Meanwhile, commenting on the outlook of Nifty, Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "The underlying trend of Nifty remains rangebound (24400-24000) with positive bias. Any sustainable bounceback from near the lower range could open a sizeable bounce towards 24300-24400 levels in the near term. Important supports for trend reversal is placed at 24000."
Foreign institutional investors (FIIs) have remained net buyers in August 2026 for the second straight month. They infused Rs 30,919 crore into Indian equities this month. This follows Rs 20,200 crore invested in July this year. Analysts attribute resilient economic activity, a stable rupee, and easing geopolitical concerns in West Asia as key factors leading to inflows of foreign capital into the Indian market.
V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, "The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and more importantly the improving earnings growth in India. A significant trend in FPI investment in India recently is the direction of flows towards the SMIDs (mid-and small-caps.) Growth and earnings momentum are much higher in the SMIDs compared to the large-caps. This trend of FPI investment in SMIDs is likely to continue.”
Earlier, FIIs sold equities worth Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April, and a massive 1.17 lakh crore in March 2026. Before the selling streak, FIIs invested Rs 22,615 crore in February, according to Central Depository Services Ltd (CDSL) data.
On the recent outperformance of midcaps and small caps, Dinshaw Irani, MD & CEO, Helios India said, "Once again, the mid and small caps recorded far greater growth in earnings as compared to the large caps. The same was reflected in the respective indices, with Nifty SmallCap 250 beating the Nifty Midcap 150, which in turn beat the Nifty 50. We expect a similar trend to continue as we believe the earnings growth of the mid and small caps universe will maintain the outperformance vis-à-vis the large caps universe. This is due to the large caps universe cohort consisting of low-growth industries like IT, FMCG, large banks, etc., while the mid and small cap universe consists of new-age companies/industries. Choosing to invest in large vs mid/small caps is akin to investing in history vs the future."
Meanwhile, commenting on the outlook of Nifty, Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "The underlying trend of Nifty remains rangebound (24400-24000) with positive bias. Any sustainable bounceback from near the lower range could open a sizeable bounce towards 24300-24400 levels in the near term. Important supports for trend reversal is placed at 24000."