New Delhi, May 31 (IANS) Amid concerns surrounding the valuations of AI-related stocks and the concentration risk involved in investing in a few stocks in this segment, FII flows into this segment might decline and India may again start attracting FII flows, according to analysts. Total FII selling stood at Rs 32,963 crore (up to May 30), taking the total selling for 2026, so far, to Rs 224,932 crore. This year, so far, FIIs have invested Rs 15,497 crore through the primary market. Poor earnings
growth in India, much superior earnings growth in countries like the US, Japan, South Korea and Taiwan and the strong AI-related trade in these countries, particularly in South Korea and Taiwan, contributed significantly to the FII selling in India and moving the money to the above mentioned markets, according to Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd. Another major factor responsible for the FII selling has been the steady depreciation in rupee. Rupee, which was about 90 to the dollar at the beginning
of this year, steadily depreciated to 96.96 recently. But during the last couple of days, rupee has been appreciating; rupee closed at Rs 95 to the dollar on Friday. “The sharp decline in Brent crude to $92 contributed significantly to the stability in the rupee. This stability in the rupee can restrain the FII flight from India,” the market watcher said. The primary catalyst for this large-scale FII withdrawal has been escalating geopolitical tensions in West Asia, which have heightened global uncertainty and risk aversion.
This has been compounded by several macroeconomic pressures such as weakening Indian Rupee, higher crude prices. Looking ahead, institutional flows in the coming month are likely to remain sensitive to developments around US–Iran tensions, oil-price trajectories and RBI monetary policy outcome and progress of the monsoon, said market experts.
FII flows, AI-related stocks, rupee, Brent crude, West Asia tensions, US–Iran tensions, RBI monetary policy, monsoon, Geojit Investments, Dr VK Vijayakumar, institutional flows, primary market investments, earnings growth
So basically AI stocks made foreigners leave? Cool cool.
I don’t get it… rupee was falling so they sold, but now rupee is appreciating so they’ll come back? Seems backwards to me. Also Brent crude down right when this happens? convenient.
Why is everyone blaming AI like it’s a person lol. It says FIIs worry about concentration risk in AI stocks but then the main catalyst is West Asia tensions? Those are different things. Either way, rupee dropped to 96 and now it’s 95 so we’re safe? until next headline I guess.
Brent crude went to $92 so the rupee stabilized… ok but what about the whole US-Iran thing? Every time that pops up oil spikes and then suddenly “stability” happens again. Meanwhile India earnings growth is “poor” compared to US/Japan etc which is probably why my neighbor’s stocks are always down. Monsoon too?? like weather controls foreigners??