Foreign portfolio investors have maintained their net buying stance in the second half of July, marking a second consecutive fortnight of inflows and the strongest purchase period since early February. According to data from the National Securities Depository (NSDL), net FPI inflows stood at ₹15,560 crore during July 1-15, following ₹14,019 crore in the previous fortnight (June 16 to June 30). The sustained buying momentum comes after foreign investors had turned net buyers in the first half of July, marking a significant shift from the previous period. This represents a notable improvement from the previous fortnight, when metals and mining had witnessed an outflow of over ₹4,370 crore.
Consumer services emerged as the top destination for foreign investment during the first half of July, attracting the highest foreign buying across all sectors. According to The Economic Times, consumer services, including e-commerce and hotels, attracted the highest foreign buying during the period, followed by metals and mining and healthcare. In contrast, automobiles and auto components, capital goods and telecom witnessed the highest outflows. Of the 24 sectors tracked, 15 sectors received flows while 8 saw outflows, with banks and IT among the beneficiaries. The IT sector showed a notable turnaround, with FIIs becoming marginal buyers worth ₹60 crore after pulling out over ₹34,000 crore from these shares in 2026 till June, marking the second-highest selling in a sector after banks.
The banking sector maintained its positive trajectory with inflows worth ₹1,975 crore in the first half of July after receiving ₹3,371 crore in June. As per The Economic Times, banks received flows worth ₹1,975 crore during the current period, continuing their positive trend from the previous month. However, the sector has faced significant selling pressure in 2026, with foreign investors selling bank shares worth over ₹1 lakh crore so far this year. The sustained buying in banking stocks reflects renewed confidence in the sector's prospects amid improving market conditions.
The sustained foreign investor interest is being driven by multiple factors, including declining energy prices after the Middle East ceasefire eased geopolitical concerns, as noted by Pankaj Pandey, head of fundamental research at ICICI Direct. According to The Economic Times, short covering in index heavyweights ahead of the earnings season has also contributed to the buying momentum. The strong buying in metal stocks has come as a surprise given their recent underperformance, while metals and mining remain attractive as long-term structural themes despite recent underperformance. Apurva Sheth from Samco Securities highlighted that after months of consistent selling in IT, FIIs have turned marginal buyers this fortnight, suggesting the sector may have bottomed out.
