Indian stocks had their second straight weekly gain, and on Friday overseas funds bought shares for the first time in 15 sessions. It’s too early to call a turn, but the selling has slowed sharply.
For weeks, the story of Indian markets has been the same. Foreign investors sell. Domestic investors buy. The market drifts lower.
This week, it was something different.
The Nifty 50 rose about 2.8% over the week to close at 23,146.15 on Friday. The Sensex ended at 74,729.27. It was the second straight weekly gain, following eight weeks of losses before that.
Rare buying day
The bigger surprise came on Friday. Foreign institutional investors were net buyers of ₹1,166 crore, according to provisional exchange data. That ended a run of 15 consecutive sessions of selling.
Small buying, no doubt, but the trend has broken. Over the full week, foreign investors sold about ₹8,990 crore, sharply lower than the roughly ₹30,000 crore they sold the week before.
Domestic institutions did something unusual too. They were net sellers on Friday, offloading ₹3,661 crore, probably booking profits after a strong run. Over the week as a whole, though, they remained buyers, as they have been for nine straight weeks.
What changed
Three things lifted sentiment.
Oil came off its highs, easing fears about inflation and the import bill. SEBI’s decision to keep derivatives expiry settlement on the familiar 30-minute VWAP method removed an irritant for traders. And the rupee recovered after the RBI started supplying dollars directly to oil companies, removing a big source of daily dollar demand.
IT stocks did much of the heavy lifting, as solid results from TCS, HCLTech and Tech Mahindra suggested the sector’s worst fears were overdone. Softer US bond yields also helped.
The bigger picture is still tough
One good week doesn’t erase a difficult year. Foreign investors have pulled about ₹52,100 crore out of Indian shares in October so far, taking their total for 2026 to about ₹3.12 lakh crore. That is nearly double what they withdrew in all of 2025, itself a heavy year.
The reasons haven’t gone away. US bond yields remain high, the dollar is strong, and oil, though lower this week, is still expensive. Money continues to flow toward North Asian markets riding the artificial intelligence boom, where India has fewer obvious beneficiaries.
Domestic investors have been the market’s shock absorber. Domestic institutions bought about ₹74,700 crore of shares in October up to 16 October, more than offsetting foreign selling. Monthly investments from millions of Indian households through mutual funds have kept that money coming.
Will foreigners come back?
Navneet Munot, chief executive of HDFC Asset Management, said on Friday that he remained confident foreign investors would eventually return as net buyers, given India’s long-term fundamentals. He also noted that foreign funds have kept buying into IPOs even while selling existing shares.
The coming week will test that. Jio Platforms opens India’s largest-ever IPO on 21 October, with anchor investors bidding on Monday. Foreign participation in that offer will be one of the clearest signals yet of how overseas money feels about India. Markets are closed on Tuesday for Dussehra.
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