Foreign institutional investors sharply increased purchases of Indian equities on September 2, buying a net ₹6,688.37 crore of equities according to provisional data, nearly six times the ₹1,143.38 crore they purchased in the previous session. The latest numbers mark a sharp turnaround in foreign investor activity over the past two sessions, with gross FII purchases standing at ₹26,715.88 crore compared with sales of ₹20,027.51 crore. This represents a significant increase from the ₹1,780.75 crore net outflow recorded on August 31, highlighting the volatile nature of foreign investor sentiment in recent weeks. Despite this recent buying, the two sessions together still leave FIIs as net sellers by about ₹6,843 crore, though the latest data shows a clear reversal in foreign investment patterns.
Indian equity benchmarks ended lower on September 2, with the Nifty closing at 23,914, slipping below the 24,000 mark for the first time in more than a month. The Sensex fell 374 points to 76,570, while the Nifty Bank declined 238 points to 57,172 and the Midcap index dropped 333 points to 63,002. Despite the ₹9,500-crore combined institutional inflow, Indian equities ended Wednesday lower as weak global cues and selling in auto and IT stocks weighed on the market. Thirty-six of the 50 Nifty constituents ended lower, including seven that lost at least 2%, with the advance-decline ratio at 2:3. Among Nifty stocks, Asian Paints emerged as the biggest Nifty loser, while auto stocks were among the biggest drags after mixed August sales updates, with the Nifty Auto index falling around 2%. Higher crude-oil prices also weighed on airlines, paint makers and oil-marketing companies, with Coal India bucking the weakness, rising more than 4% after its August update.
Together, FIIs and DIIs pumped a net ₹9,501.35 crore into Indian equities on Wednesday, providing significant support to the market despite the overall decline. Domestic Institutional Investors (DIIs) also remained buyers, purchasing a net ₹2,812.98 crore worth of equities, buying shares worth ₹17,639.89 crore and selling ₹14,826.91 crore. This represents an increase from net DII buying of ₹1,846.94 crore on Tuesday. The ₹9,500-crore combined institutional inflow means FIIs have bought a net ₹7,831.75 crore over the past two sessions — almost enough to offset the nearly ₹8,000-crore selloff on August 31. This sustained institutional support, combined with the ₹2,990.32 crore combined institutional buying from the previous session, demonstrates the resilience of domestic and foreign investor confidence despite global headwinds.
Foreign institutional investors (FII) outflows from India are expected to continue through 2026, according to Adrian Mowat, Investor from Hong Kong SAR. As reported by CNBC TV18, Mowat sees little at present to suggest a reversal of the current trend. The expert notes that India does run a current account deficit and requires external funding, which creates additional vulnerability to rising global yields and risk-free rates. However, recent market data shows signs of stabilization, with FPIs investing around $2.12 billion in July 2026 after record net equity outflows of about $19.6 billion in FY26. This suggests that while long-term outflows may persist, short-term flows have begun to turn positive. As of 2026, Foreign Portfolio Investors (FPIs), formally classified as FPIs, remain major participants in Indian equities, with their activity continuing to influence market liquidity, valuations and institutional ownership alongside strong domestic investor participation.
Power stocks also gained on expectations of stronger demand, with Tata Power and JSW Energy rising around 4% each. Adani Ports and Adani Enterprises recovered from their intraday lows to finish around 1% higher. Coal India bucked the weakness, rising more than 4% after its August update, while Adani Group stocks also gained, with Adani Ports rising more than 3%. However, Brent crude climbed above $92 a barrel, putting pressure on stocks sensitive to higher oil prices. Asian Paints and BPCL fell as much as 4%, while IndiGo declined nearly 4% after an increase in jet-fuel prices. Sugar stocks fell as much as 6% after the government reduced the stock-holding limit. EPL fell more than 8% after promoter Epsilon Bidco sold its entire stake, while Ujjivan Small Finance Bank declined over 5% after its managing director and chief executive sought early retirement.
