New Delhi, Aug. 3 -- Foreign portfolio investors (FPIs) turned net buyers in India's secondary cash market in July for the first time in five months, injecting Rs.6,731.97 crore since the West Asia conflict broke out on 28 February.

Combined with Rs.35,099 crore in purchases by domestic institutional investors (DIIs) and FPI short-covering of 83,297 Nifty and Bank Nifty futures contracts, the buying spree pushed the Nifty up 2.17% month-on-month to close July at 24,383.60, according to exchange and depository data. Short covering refers to traders closing out bearish derivatives positions by buying them back.

Analysts expect stronger foreign cash inflows and further short-covering in index futures to power a rally back toward pre-war le...