Foreign institutional investors (FIIs) have recently started displaying signs of stabilization in the Indian equities market after a period of continuous outflows. In the last three sessions of the week, FIIs turned into net buyers, contributing to the market’s recovery and boosting overall sentiment.
Despite this positive trend, the total flows for the week remained slightly negative at around Rs 250 crore, indicating the need for sustained inflows to confirm a more lasting shift in the market direction, as per analysts. On the other hand, domestic institutional investors (DIIs) witnessed outflows of approximately Rs 6,300 crore.
Analysts highlight that DIIs play a crucial role in stabilizing the market, offering consistent structural support. The Indian rupee also strengthened at 93.24 (+0.15 per cent) this week, supported by a weaker dollar index around 98, as optimism regarding US–Iran de-escalation talks reduced the safe-haven appeal of the dollar.
Jateen Trivedi, VP Research Analyst at LKP Securities, mentioned that the positive market sentiment is further reinforced by FII inflows and expectations of upcoming India–US trade discussions, encouraging capital inflows into the domestic markets. Moreover, a recent decline in crude oil prices has alleviated pressure on India’s import expenses, providing additional backing to the rupee.
The global oil market experienced a significant drop in prices following Iran’s announcement that the Strait of Hormuz was fully open for commercial shipping during a ceasefire period, easing concerns about prolonged supply disruptions in a crucial energy route. Analysts noted that while the rupee is currently well-supported, its sustainability hinges on geopolitical developments and stability in crude oil prices.
Looking ahead, market analysts anticipate a news-driven week with a positive bias, with particular focus on the progress of US–Iran negotiations.
