In April, foreign investors bought a significant amount of shares in India’s financial sector. According to data from the National Securities Depository, foreign portfolio investors (FPIs) spent 184.09 billion rupees (about $2.18 billion) on financial stocks, making it the third-highest monthly investment in this sector. As a result, the Nifty Financial Services index rose by 4.1%.
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The second half of April saw record-breaking inflows of $2.71 billion, the highest for any two-week period. This marked the first time in 2025 that foreign investors bought more Indian stocks than they sold, helping the Nifty 50 index rise by 3.5%.
The change in foreign investment is linked to several positive factors, including a reduction in global trade tensions, expectations of a trade agreement between the U.S. and India, and attractive stock prices in India. Bajaj Broking, in its market outlook, suggested that this trend could continue if India’s economy remains strong.
In April, the U.S. paused its tariffs on India and indicated that a trade deal with India would be announced soon. Additionally, strong earnings from top Indian banks like HDFC Bank and ICICI Bank also encouraged foreign investments in the financial sector.
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While financial stocks attracted foreign investments, some other sectors faced a decline. For instance, the information technology sector saw foreign investors pulling out $1.80 billion, partly due to concerns over slower economic growth in the U.S., which is a major market for Indian IT companies. Analysts believe that the U.S. tariffs and lower growth in the U.S. and Europe could hurt the IT sector’s performance in the next few years.
Overall, April was a strong month for foreign investments in India’s financial stocks, and if the country’s economic outlook stays positive, the trend might continue.
