FIIs Return: Biggest Indian Stock Market Purchase in 2 Months as Rupee Stabilizes

• Foreign Institutional Investors (FIIs) made their largest purchase in the Indian stock market in two months, buying $644 million last week.
• This significant buying followed the Indian rupee's recovery from its record low, marking its strongest weekly gain in six months.
• Previously, FIIs sold $1.8 billion over three weeks as the rupee depreciated by over 1%.
• FII investment decisions are heavily influenced by currency movements, as they seek dollar-denominated returns.
• Rupee stability is now a critical confidence factor for foreign investors, indicating sustained FII inflows if the currency remains steady.

Why It Matters: Rupee stability is crucial for attracting and sustaining foreign investment in the Indian stock market.