New Delhi, Aug 10: Indian investors are increasingly becoming a strong source of support for the domestic stock market, with domestic institutional investors (DIIs) crossing Rs 5 lakh crore in net equity investments for the third consecutive calendar year.

According to stock exchange data, DIIs — including mutual funds, insurance companies, banks, domestic financial institutions and pension funds — have invested a net Rs 5.13 lakh crore in Indian equities till August 7, 2026.

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The figure is higher than the Rs 4.48 lakh crore invested during the corresponding period of 2025. In the full calendar year 2025, DIIs invested Rs 7.88 lakh crore in Indian equities, compared with Rs 5.26 lakh crore in 2024.

Over the past 36 months since August 2023, domestic institutional investors have invested around Rs 19.21 lakh crore in Indian equities. During the same period, foreign portfolio investors sold Indian stocks worth nearly Rs 10 lakh crore.

Market experts said the steady domestic inflows reflect growing participation by Indian households in financial markets, particularly through mutual funds and systematic investment plans.

Despite geopolitical tensions in West Asia, investors have continued to put money into domestic financial assets, supported by the resilience of the Indian economy and steady economic activity.

Healthy GST collections in recent months and the absence of major negative surprises on the domestic economic front have also helped maintain investor confidence, analysts said.

Strong inflows into equity and balanced mutual fund schemes have provided domestic institutions with a consistent pool of capital to invest in the market. Analysts expect these flows to remain healthy in the coming months.

Improving corporate earnings, moderating energy prices, easing geopolitical risks and a correction in equity valuations from their 2024 peaks have also improved the overall risk-reward outlook for Indian equities.

Foreign institutional investor flows have turned positive after four months of heavy selling, providing an additional positive signal for the market. Analysts expect the combination of foreign and domestic buying to support market sentiment in the near term.

During the June 2026 quarter, DIIs showed a preference for consumer stocks, public sector banks, energy, telecom, metals and technology companies within the Nifty 500.

They remained relatively underweight on private banks, NBFCs, capital goods, chemicals, real estate, healthcare and automobile stocks.

The continued rise in domestic investment is strengthening India’s financial markets and reducing their dependence on foreign capital flows, providing a more stable source of liquidity during periods of global uncertainty.