The latest inflow comes following a net infusion of over Rs 2,300 crore in the capital markets, both equity and debt, last month.
Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.
According to the latest depository data, foreign portfolio investors (FPIs) pumped in Rs 2,409 crore into equities and Rs 5,168 crore into the debt market during August 1-17, taking the total to Rs 7,577 crore.
The inflows can be attributed to the improvement in some of the underlying factors such as weakness in crude oil prices and better earnings from Indian Inc, said Himanshu Srivastava, Senior Research Analyst at Morningstar.
While this helped the market to make record highs, it would have also prompted FPIs to capitalise on its uptrend.
However, there is a bit of uncertainty and cautiousness among FPIs at the moment, he added.
"While the underlying factors are positively inclined, the focus of FPIs would be on their sustainability over the long term," Srivastava said.
"Trump's stance on not increasing Fed Rate has changed the rate trajectory expectations and there is a halt on increasing exposure to US debt," Harsh Jain, COO at Groww.in, said.
"Among the emerging markets, India shows significant signs of stability as IMF forecast has raised its economic outlook on India and the yield on the benchmark bonds has gone up to 7.78 per cent in August. All these factors have attracted investors," he added.
Overall, so far this year, FPIs have pulled out over Rs 1,500 crore from equities and more than Rs 36,000 crore from the debt markets.