Overview
- Domestic institutional investors have become the primary source of liquidity and ownership in Indian equities, lifting DII holdings in the Nifty 500 to a record 21 percent and buying through every month of 2026.
- In July, foreign portfolio investors reversed months of heavy selling and turned net buyers of Indian assets, adding about ₹20,200 crore to equities and roughly ₹29,200 crore to debt according to depository and exchange data.
- DII purchases remained large in July at roughly ₹35,100 crore, a flow driven by steady SIPs, insurance and pension allocations that mechanically feed domestic funds and help absorb foreign outflows.
- Sector patterns shifted as DIIs raised stakes across large, mid and small caps while foreigners were selective, increasing exposure to metals, PSU banks, NBFC lending, capital goods and logistics and trimming positions in some private banks and tech names.
- Markets have rebounded on easing crude and a firmer rupee but the near‑term path depends on Q1 corporate results, the Reserve Bank of India’s policy decision and any escalation in Middle East tensions that could push oil higher.