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News Topical, Digital Desk : After months of persistent selling, foreign institutional investors (FIIs) returned to the Indian stock market as buyers in February. In February 2026, FIIs invested a net of approximately $2.44 billion, marking the largest monthly inflow in 17 months. This change comes at a time when markets remain volatile, and investors are trying to understand whether this is just a temporary pause or the start of a new rally.
Question 1: How much did FIIs invest in February?
Answer: In February 2026, FIIs made a net investment of approximately $2.44 billion. Of this, approximately $2.14 billion was invested in the secondary market and approximately $299 million in the primary market. This is the largest monthly inflow since September 2024.
Question 2: Has FII selling completely stopped?
Answer: It's too early to say so. According to market experts, this buying is much smaller than the recent heavy selling. It's currently being considered a "pause" or a pause, not a sign of a complete trend reversal.
Question 3: How did the market perform in February?
Answer: The Sensex and Nifty remained almost flat in February, while the midcap and smallcap indices saw a slight rise. This indicates selective buying in the market.
Question 4: Why did FIIs sell so heavily earlier?
Answer: Between 2024 and 2025, FIIs sold approximately $46 billion in the secondary market. Better returns and lower valuations in markets like China, Taiwan, and South Korea drove the shift of funds there. During the AI rally, India was considered an "anti-AI play," which increased pressure on IT stocks.
Question 5: Is the IT sector still under pressure?
Answer: Yes. In the first half of February, FIIs sold approximately $1.21 billion in IT stocks. AI-related risks and global uncertainty are still impacting the sector.
Question 6: What do experts think?
Answer: Some experts say that India's underperformance is making valuations attractive. Foreign portfolios are underweight in India, so positions may gradually build. However, if NPAs in the IT sector or banking rise, there will be a risk of outflows again.
Question 7: What are the future signals?
Answer: Valuations are now lower than before. Large-cap stocks have seen a time correction and mid- and small-cap stocks have seen increased attractiveness after a decline. If earnings stabilize over the next 12–18 months, FII buying could strengthen.
February's FII inflows are certainly a positive sign for the market, but they cannot yet be considered a trend reversal. Foreign investors are currently re-evaluating India. If earnings improve and macro stability persists, significant buying could be seen in the coming months. This is an "early sign" for the market, but the true direction is yet to be determined.
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