FII Sentiment Rebounds: Indian Equities Attract Positive Flows in July 2026
By Market Desk
Positive FII flows in July 2026 signal a sentiment shift for Indian equities after months of selling. Domestic buying provides crucial market resilience.
Foreign Institutional Investor (FII) sentiment towards Indian equities is showing early signs of a turnaround, with flows turning positive in July 2026.
This shift follows several months of sustained selling pressure, as detailed in the August 2026 edition of The Macro Canvas by Jio BlackRock Asset Management.
Key Market Movements
- FII flows became positive in July 2026.
- Significant FII outflows occurred from March to June 2026.
- March 2026 alone recorded approximately $10.4 billion in outflows.
Consistent buying by domestic mutual funds played a crucial role in market resilience, absorbing foreign selling pressure.
This strong domestic participation provided a vital counterbalance, limiting the impact of foreign outflows on overall market liquidity and sentiment.
Investor Positioning Nears Recovery Levels
The report indicates that current foreign investor positioning is historically weak, nearing levels associated with past market recoveries.
India-dedicated flows, as a percentage of India’s free-float market capitalization, are approaching figures last seen during the Covid collapse in December 2020.
This suggests a significant portion of negative sentiment is already reflected in investor positioning.
With foreign flows beginning to recover alongside continued domestic support, the market appears poised for a potential sentiment reversal.