Mumbai, Aug 8: Foreign institutional investors (FIIs) continued to buy Indian equities for the second week in a row, while strong domestic institutional buying provided additional support to the market amid improving investor sentiment.
FIIs made net purchases of Rs 2,911 crore during the week, following buying worth Rs 5,949 crore in the previous week, according to provisional exchange data.
Domestic institutional investors (DIIs) were even more active, recording net purchases of Rs 7,768 crore during the week. DIIs were net buyers in four of the five trading sessions.
Analysts attributed the continued institutional buying to easing geopolitical tensions, which have helped improve investor confidence and lifted sentiment across the market.
“The sustained buying by both FIIs and DIIs was largely driven by the de-escalation of geopolitical tensions, which helped strengthen investor confidence and supported positive market sentiment,” said Pabitro Mukherjee, Deputy Vice President–Research, Bajaj Broking.
FIIs reverse four-month selling trend
The latest weekly inflows come after a significant turnaround in foreign investor activity in July.
FIIs turned net buyers in July after remaining net sellers for four consecutive months since March. They bought Indian equities worth around $2.5 billion during the month.
The return of foreign investors coincided with a positive performance by the domestic market. The Nifty rose 2.2 per cent in July, following a 1.4 per cent gain in June.
Foreign investors were active in both primary and secondary markets during the month. The primary market recorded net FII inflows of around Rs 123 billion, while the secondary market saw net inflows of approximately Rs 110 billion.
Domestic institutions increasingly cushion foreign outflows
The growing strength of domestic institutional investors has emerged as an important feature of India’s equity market.
FII ownership of Indian equities has declined from 20 per cent in July 2016 to 14.3 per cent in July 2026. Meanwhile, DII ownership has risen steadily, reaching 18.7 per cent in March 2026.
Over the last 12 months, Indian primary markets attracted approximately $7.8 billion in net FII inflows. However, foreign investors remained net sellers in the secondary market, with outflows of around $42.5 billion.
The data points to a gradual shift in the ownership structure of Indian equities, with domestic institutional capital playing a larger role in supporting the market.
Nifty ends week higher
Indian equities maintained a positive bias for most of the week as easing geopolitical tensions supported investor sentiment.
The Nifty closed at 24,570.65, up 187.05 points from the previous week’s close of 24,383.60.
With FIIs returning to the buying side and DIIs continuing to deploy capital, institutional flows are providing a supportive backdrop for the Indian market. Investors will now watch whether the positive trend in foreign inflows continues in the coming weeks.