Domestic institutional investors (DIIs) continued to bolster Indian equity markets this week, countering the selling pressure from foreign institutional investors (FIIs). FIIs divested equities worth Rs 20,710 crore, while DIIs invested Rs 21,602 crore, aiding benchmark indices to rebound by over 5 percent. Analysts linked the ongoing FII selling to global and macro-economic uncertainties such as geopolitical tensions, high crude oil prices, and currency depreciation.
On a positive note, FIIs recorded a net inflow of Rs 672 crore on Friday, their first positive session since February 25. However, experts cautioned that sustained follow-through would be necessary to confirm a lasting shift in foreign sentiment. Data for the month also reflected a similar pattern, with FIIs pulling out Rs 38,973 crore from Indian equities, while DIIs infused Rs 35,983 crore. Alongside institutional investors, retail participants remained active, with record SIP contributions of Rs 32,087 crore in March.
The recent de-escalation in US-Iran tensions, following a two-week truce announced by President Donald Trump, led to a drop in crude prices and boosted investor confidence. Market observers anticipate that foreign institutional flows will be influenced by developments in US-Iran negotiations, their impact on oil prices, and corporate earnings. Indian stock benchmarks closed positively for the second consecutive week, driven by significant short covering amid the US-Iran ceasefire.
Nifty surged by 5.89 percent during the week, closing at 24,050 with a 1.16 percent gain on the last trading day. The Sensex climbed 918 points or 1.20 percent to reach 77,550, registering a weekly increase of 5.77 percent. Bank Nifty outperformed the broader market, finishing at 55,912, up 1.99 percent on Friday, with a substantial weekly surge of 8.47 percent.
