Foreign portfolio investors spent most of September and October selling Indian financial stocks. In the past two weeks they have reversed course, buying a net ₹6,500 crore of bank and NBFC shares.
Valuations did the work
Private bank stocks had fallen to their cheapest level against book value in three years. That gap, together with September-quarter results that showed bad loans holding steady, pulled overseas money back in.
Not everyone is convinced
Fund managers say the flows could turn again if the dollar strengthens or if deposit costs keep squeezing margins. The next test comes with the RBI’s policy decision on Wednesday.