FII buying resumes: What it means for the Indian stock market?

After months of selling, foreign institutional investors (FIIs) are finally making a comeback in the Indian stock market! On March 18, 2025, FIIs turned into net buyers, marking a significant shift after a prolonged period of outflows.

Why Do FIIs Matter?

Think of FIIs as the heavyweights of the stock market—when they invest, it often signals confidence in the market’s future. Their buying activity can boost investor sentiment, drive up stock prices, and improve overall liquidity.

A Rare Positive Turn

Let’s put things in perspective: since October 1, 2024, there have been 115 trading sessions, and FIIs have been net buyers on just 13 of those days—that’s like getting a surprise holiday only 13 times in 115 school days!

Even in 2025, the trend hasn’t been much different. Out of 53 trading days so far, FIIs have been net buyers on just four—making this reversal a noteworthy event.

What Happens When FIIs Buy Big?

History tells us that when FII inflows exceed ₹1,250 crore (roughly $150 million) and the Nifty 50 gains more than 1%, it’s usually a strong bullish signal. Since 2023, this has happened only 14 times, and if we look further back to 2011, there have been just 99 such instances.

Why Should Investors Pay Attention?

When FIIs return after a selling spree, it’s like the first rain after a long dry spell—bringing relief and optimism to the market. Analysts see it as a sign that global investors are regaining confidence in India’s growth story.

What’s Next for the Market?

While a single day of FII buying doesn’t guarantee a long-term trend, history suggests that when FIIs invest big and the market rises alongside, it often leads to further positive momentum. Much like how good early grades can set the tone for a strong academic year, this could be the start of something promising for Indian equities.

The Takeaway

The return of FIIs feels like watching your favorite player step back onto the field after an injury—exciting, but with cautious optimism. While this isn’t a definitive trend yet, it’s definitely something investors will be watching closely in the coming weeks.