Foreign investors are buying again: how $2.59 billion fueled Sensex’s 553-point jump

After months of sustained selling, foreign portfolio investors have turned net buyers of Indian markets this month, injecting $2.59 billion (Rs 24,662 crore) in just the first 10 days of July. Equities accounted for $1.6 billion of that, more than 61% of total inflows, followed by investments through the Fully Accessible Route worth $697 million and debt under the general limit amounting to $340 million.

The turnaround stands in contrast to Tuesday’s session, when Foreign Institutional Investors had sold equities worth Rs 739.69 crore. Analysts say the shift has been supported by a stable rupee and a move in investment preferences away from semiconductor-heavy markets, a sign of improving broader sentiment even as day-to-day flows remain choppy.

The renewed buying helped Dalal Street stage a sharp comeback on Wednesday. The BSE Sensex jumped 553 points to 77,603.57 in early trade, while the NSE Nifty gained 148.15 points to 24,198.40 — a reversal from Tuesday, when the Sensex had dropped 561.46 points, or 0.72%, to close at 77,054.94, and the Nifty fell 158.95 points, or 0.66%, to settle at 24,052.05.

The rupee strengthened by 5 paise to 96.11 against the US dollar in early trade after slipping to 96.16 in the previous session. Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said the rupee had come under pressure on Tuesday due to surging crude oil prices, higher US Treasury yields and geopolitical tensions, and expects the currency to trade in a 95.90-96.50 range going forward.

Global cues added further support, with easing tension around the Strait of Hormuz — after Trump withdrew a proposed 20% transit fee on cargo passing through it — helping Brent crude settle around $85.6 a barrel, and a rally across Asian technology stocks lifting regional sentiment.

Technical analysts said the Nifty continues to hold above its key 23,900 support level, with the broader market bias remaining sideways to bullish in the near term.

Bombay Stock Exchange building at Dalal Street, Mumbai. Wikimedia Commons/by BSEINDIA (CC BY-SA 3.0).