FIIs turn net buyers in March amid rate cut hopes

Mumbai, March 28 (IANS) Foreign Institutional Investors (FIIs) have turned net buyers of Indian equities in March for the first time after two months of continuous selling, as per the latest National Securities Depository Limited (NSDL) data.

This shift comes amid expectations of an interest rate cut by the Reserve Bank of India (RBI) next month, attractive stock valuations, and the US Federal Reserve’s latest stance on rate cuts for 2025.

Until March 26, FIIs had been net sellers, offloading shares worth around Rs 67 crore, according to NSDL data.

On March 27, the FIIs purchased equities worth Rs 11,111 crore, while the Domestic Institutional Investors (DIIs) also bought equities worth Rs 2,517 crore.

This marks the first major net inflow since December 2024, when FIIs had invested a similar amount in Indian stocks.

The highest FII buying activity this year was recorded on March 21, with net purchases totalling Rs 7,470.36 crore.

Earlier in March, FIIs had sold shares worth over Rs 22,000 crore, continuing the selling trend that began in October 2024.

Over the past five months, foreign investors have pulled out around Rs 2.19 lakh crore from Indian equities.

Now, the trend seems to be reversing. The expectation of interest rate cuts by both the RBI and the US Fed has renewed investor confidence.

The US central bank has hinted at two possible rate cuts this year, which could boost global liquidity.

Additionally, passive fund inflows due to the Nifty index reshuffling have supported this buying momentum.

Other factors that have made India attractive for global investors include recent liquidity measures by the RBI, lower stock prices after a market correction, and weaker performance of US and Chinese equities.

Market experts believe that the direction of FII fund flows will depend on global risk appetite and Indian market valuations.

They expect a short-term market rally after April 2 as concerns over reciprocal tariffs ease.

–IANS

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