MARKETS
Foreign investors buy Rs 45,970 crore in Indian equities as global AI rally stumbles
Low exposure to the tech rout and falling crude prices trigger a massive foreign capital pivot back into domestic stocks.
Foreign portfolio investors injected Rs 45,970 crore into Indian equities over just five trading sessions in November, executing a sudden turnaround after remaining net sellers for two consecutive months.
The massive inflow lifted the benchmark Nifty 50 index by 8.6% during the week, marking its strongest weekly performance since February 2021. The surge helped the index pare its year-to-date losses to 4.21%. At its lowest point this year, the Nifty 50 had dropped nearly 15%, but it has now recovered close to 13% from that trough. The foreign buying also provided strong support to the Indian currency, which strengthened 0.6% to 93.91 against the US dollar—its firmest level since April—after previously touching multiple record lows.
Global tech sell-off drives capital rotation
India's limited exposure to high-flying artificial intelligence stocks, which previously dragged down its relative performance in Asia, turned into an asset as global tech shares ran into heavy selling. A sharp tech retreat saw the Nasdaq Composite drop 5.5% and the S&P 500 fall 4.4% on a single Thursday. The sell-off followed weak quarterly results from Qualcomm and mounting concerns over slowing expenditure on AI infrastructure.
Regulatory worries in Washington further unsettled investors. Strong midterm election results for US Democrats raised expectations of potential restrictions on data centre expansion, energy usage, and development costs. Additional pressure hit sentiment when Nvidia's board opened an investigation into co-founder and chief executive officer Jensen Huang over his relationship with a businesswoman linked by US intelligence agencies to Chinese espionage. A proxy for Nvidia shares dropped 2% on Hyperliquid following the news.
Asian tech-heavy markets took an immediate hit, with benchmark indices in South Korea and Japan plunging about 6% on Friday before making partial recoveries. According to Vanda Research, Thursday saw the heaviest single day of retail net selling since the Covid pandemic. Schwab Center for Financial Research chief investment strategist Liz Ann Sonders noted that retail traders failed to step in as dip buyers, leaving tech indices heavily de-risked and oversold.
Global funds responded by rotating capital out of bloated tech names and into markets like India. Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, attributed the sharp domestic rally to three primary factors: a retreat in oil prices, the unravelling AI trade, and attractive Indian equity valuations backed by stable earnings.
Crude oil drop provides macro relief
Beyond the tech exit, Indian markets gained substantial relief from energy markets. Brent crude prices fell about 13% over the week to settle around $98 a barrel, recording the sharpest weekly drop since the onset of the pandemic. The decline was prompted by US midterm election results, which market participants interpreted as increasing the likelihood of a de-escalation in the US–Iran conflict.
For India, which relies heavily on imported crude, cheaper oil significantly eases inflation pressures, narrows the current account deficit, and supports domestic currency stability. The rupee rebounded from around 95.4 per US dollar to 93.90 within a week.
| Indicator or Benchmark | Recent Movement / Value | Context and Impact |
|---|---|---|
| FPI Net Equity Inflow | Rs 45,970 crore | Reverses two consecutive months of foreign net selling |
| Nifty 50 Weekly Gain | +8.6% | Strongest weekly gain since February 2021 |
| Indian Rupee (vs USD) | 93.91 | Rebounded 0.6%; strongest level since April |
| Brent Crude | ~$98 per barrel | Fell ~13% in steepest weekly drop since Covid |
| October Gross GST | Rs 2.31 lakh crore | Record monthly collection, up 22.9% YoY |
Festive demand and strong macroeconomic data
Domestic economic indicators entering the new commercial year of Samvat 2083 also helped sustain foreign interest. Gross Goods and Services Tax collections for October reached a record high of Rs 2.31 lakh crore, up 22.9% year-on-year. Net GST receipts grew 25.6% to Rs 2.03 lakh crore.
Festive spending held up despite high retail prices. TOI reported that Dhanteras gold purchases reached approximately 52 tonnes, up 12% from 46 tonnes in the prior year, generating an estimated Rs 70,000 crore in sales. Silver sales climbed to 300 tonnes from 250 tonnes. Jewellery chains recorded volume growth of 8% to 10% and value gains of 18% to 20%, with Senco Gold reporting a sales value increase exceeding 25%.
Macroeconomic momentum remained visible across other metrics. Reuters reported that India's services sector expanded at its fastest pace in four months during October. Meanwhile, the Finance Ministry estimated India's second-quarter FY27 GDP growth at 7.35%.
Corporate AI deployment accelerates internally
While Indian public markets offer few pure-play AI equities, domestic enterprises are deploying the technology internally to optimize industrial operations. Tata Steel reported in its integrated report for 2025-26 that it deployed 860 AI models and agents across its business, including over 300 agents for commercial intelligence, auditing, and invoice processing.
Similarly, World Economic Forum case studies cited ACG Packaging Materials' plant in Shirwal, Maharashtra, where machine-learning models applied to 60-year-old machinery achieved a 37% gain in first-pass yield and a 43% reduction in quality set-up times.
Key catalysts for market direction
Whether foreign investors maintain their buying spree depends on several upcoming catalyst events. Choice Wealth's Dheeraj Gaur noted that market participants will scrutinise the US Consumer Price Index data scheduled for Tuesday, November 10. A higher-than-expected inflation reading could boost US bond yields and the dollar, potentially tempering capital flows to emerging markets.
Investors will also monitor whether Brent crude stays below $100 per barrel and watch forthcoming quarterly earnings from major technology firms, including CoreWeave, Cisco, and Applied Materials, to evaluate whether the global AI sell-off has further to run.