FPIs Invest Rs 38,971 Crore In Indian Equities In First Week Of November: Three Key Factors Behind Their Aggressive Return

Foreign portfolio investors (FPIs) made a strong comeback in domestic equities after months of sustained selling, investing Rs 38,971 crore in the first week of November 2026, according to data from the National Securities Depository Limited (NSDL).

The buying marks a sharp reversal from October, when foreign investors withdrew Rs 34,843 crore from domestic equities. The latest inflows have also come at a time when Indian markets have been struggling with global uncertainties, elevated crude oil prices and concerns over foreign investors' preference for artificial intelligence (AI)-led markets.

Of the total November inflows, Rs 38,519 crore came through stock exchanges, while Rs 452 crore was invested in the primary market.

The US midterm election outcome, lower crude oil prices, and a shift in global investments away from AI stocks prompted foreign investors to increase their exposure to Indian equities.

1. US Midterm Election Outcome Raises Hopes Of Easing Geopolitical Tensions

The US midterm election outcome improved global market sentiment and raised hopes of a change in the Trump administration's policy approach. The Democratic Party's gains led investors to expect greater checks on the Trump administration's decisions. Investors also saw the results as a positive sign for diplomatic talks and a possible de-escalation of the US-Iran conflict.

Tensions in West Asia have pushed crude oil prices higher, increased India's import bill, and put pressure on the rupee.

India depends heavily on crude oil imports to meet its energy needs. Any escalation in the region, particularly around Iran and the Strait of Hormuz, raises concerns about oil supply disruptions and higher import costs.

The prospect of easing tensions between the US and Iran has helped reduce these concerns. Expectations of de-escalation also contributed to the sharp fall in crude oil prices, offering relief to oil-importing countries such as India.

2. Sharp Correction In Crude Oil Prices Provides Relief To Indian Markets

The fall in crude oil prices was another key reason behind the return of foreign investors to Indian equities. Brent crude prices declined around 13 per cent in the first week of November to nearly $97 per barrel.

Crude oil prices fell as hopes of a possible de-escalation in the US-Iran conflict reduced concerns over disruptions to global oil supplies.

Expensive oil increases India's import bill, widens the current account deficit and puts pressure on the rupee. It also raises transportation and input costs for businesses, which can affect corporate earnings and push up inflation. A sustained fall in crude oil prices could ease these pressures and improve India's economic outlook.

The rupee also strengthened to around Rs 94.15 against the US dollar from Rs 95.40 a week earlier. A stronger rupee helps foreign investors earn better returns in dollar terms when they invest in Indian assets and convert their investments back into dollars, provided other factors remain unchanged.

Lower crude oil prices can also ease inflationary pressures, reduce the current account deficit and support the rupee.

3. Reverse AI Trade: Global Investors Rotate Away From Technology-Heavy Markets

The reversal in the global AI trade was another factor that helped bring foreign investors back to Indian equities. During much of 2026, global investors directed large amounts of money towards technology companies and markets that stood to benefit from the growth of artificial intelligence (AI). This led to strong buying in AI-related stocks in the US, South Korea, Taiwan and Japan.

India, with relatively little exposure to the global AI infrastructure boom, failed to attract a similar share of foreign investment.

However, this trend changed in the first week of November. Investors began questioning whether heavy spending on AI infrastructure and data centres would generate enough returns to justify the high valuations of technology companies. Concerns over future spending also led investors to sell AI-linked stocks. 

On Thursday, November 5, all three major US stock indices recorded their biggest single-day losses since April 2025. The Nasdaq Composite fell sharply as investors sold technology stocks. Selling pressure also spread to Asian markets, including South Korea and Japan.

As global investors reduced their holdings in AI-focused markets, they started looking at other destinations. India, which had relatively lower exposure to the AI trade, gained from this shift in investment flows.

India's relatively attractive large-cap valuations and improving corporate earnings also strengthened its appeal among foreign investors.

“With the rupee relatively stable, earnings remaining strong and valuations appearing reasonable if not cheap - a global narrative change could potentially become a tailwind for FPI flows into India given that we are just one to 1.5 per cent of global benchmarks and even there the positioning appears to be light,” said Harsh Gupta Madhusudan, Chief India Strategist at Ionic Asset.

Indian equities had underperformed several global markets in the preceding months. The correction in technology stocks gave foreign investors another reason to reconsider their allocation to Indian equities.