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Below the Commentary on Monthly FII and DII July 2026 by Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking

FII AND DII WEEKLY ACTIVITY: 01-08-26

Foreign Institutional Investor (FII) selling has moderated significantly over past months, indicating a steady improvement in overseas investor sentiment. After witnessing record-high outflows earlier in 2026, the pace of selling has eased considerably, with July recording the lowest monthly outflow of the year.

The trend in monthly FII net flows highlights gradual improvement, with net outflows declining from Rs1225.4 bn in March to Rs701.4 bn in April, Rs559.6 bn in May, Rs490.3 bn in June, and just Rs57.8 bn in July based on provisional exchange data.

Encouragingly, the final week of July marked a notable shift in FII activity. Overseas investors turned net buyers in multiple trading sessions, resulting in net purchases of Rs59.5 bn for the week based on provisional exchange data. This reversal suggests improving confidence in Indian equities amid supportive domestic fundamentals.

Domestic Institutional Investors (DIIs) continue to remain net buyers in all the 7 months in the CY26. For the month of July 2026, DIIs purchased Rs 351 bn While in the previous week DIIs were net buyer by 53.9 bn.

Benchmark Indices witnessed strong pullback during last week and closed higher by 2.5% as appreciation in the Indian Rupee from lower levels and decline in crude oil prices on weekly basis lead to an improved in sentiment in the market. Nifty started the week on a positive note and gained momentum as the week progressed amid strong buying in index heavyweights. Nifty closed the week at 24,383.6 levels up by 2.6%.

In the coming month investors will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions. Domestically, the Q1FY27 earnings season and RBI monetary policy scheduled on August 3 to August 5, 2026 will be in focus.

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