Strong buying by domestic institutional investors (DIIs) helped counter heavy foreign institutional investor (FII) selling in the Indian markets last week. Despite FIIs withdrawing Rs 8,743.35 crore from Indian equities, DIIs invested a net Rs 8,790.75 crore, supporting the Nifty to close the week at 24,334.30. Market analysts note the increasing significance of domestic investors in bolstering Indian equities amidst global uncertainties.
The divergence between foreign and domestic institutional flows highlights the crucial role of domestic liquidity, stable macroeconomic fundamentals, and improving corporate earnings visibility in sustaining the Indian market. Analysts anticipate continued market volatility in the near term due to geopolitical uncertainties, crude oil price fluctuations, and evolving global monetary policies.
Global cues were mixed, with geopolitical tensions in West Asia impacting crude oil prices, trading at around $81.67 per barrel. Currency movements and global monetary policy shifts also influenced investor sentiment throughout the week. Elevated geopolitical risks, crude oil price fluctuations, and uncertainty in global interest rates are expected to maintain high market volatility in the short run.
The ongoing Q1 FY27 earnings season is seen as a key driver for sectoral rotation and stock-specific opportunities. Analysts recommend focusing on fundamentally strong companies with robust earnings visibility and relative strength rather than chasing momentum-driven rallies. The first-quarter earnings performance in FY27 is anticipated to guide market direction in the upcoming weeks, emphasizing company-specific earnings over broad-based momentum.
