For the sixth consecutive day, stock markets made a splash, driven by strong performances in banking and financial stocks. Extending their gains, the S&P BSE Sensex went up by 922.72 points, scaling a healthy peak of 77,828.23, while the NSE Nifty50 rose 281.20 points to 23,631.60.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investment Services, told media outlets that improved economic conditions and reasonable stock valuations have altered the behaviour of Foreign Institutional Investors (FIIs).
“Improving macros of the Indian economy and fair valuations have turned FIIs from sellers to buyers. More importantly, this has triggered massive short covering leading to sharp spikes in prices,” he was quoted as saying.
However, he cautioned: “April 2nd – the reciprocal tariffs day – is looming large and the uncertainty surrounding that is huge. Investors can wait for clarity to emerge regarding the reciprocal tariffs before taking a call on further investment.”
He highlighted a recent shift in foreign institutional investor (FII) behaviour. After heavy selling, FIIs turned buyers on certain days last week, making a substantial purchase of Rs 3,255 crores through exchanges on March 21st.
In March up to the 21st, foreign institutional investors (FIIs) offloaded equity worth Rs 31,718 crore, but they simultaneously increased their debt holdings by Rs 10,955 crore during the same period.
Last week, Indian markets outperformed their US counterparts, and sentiment has improved for emerging markets, with India benefiting from this shift. An analyst such as Kranthi Bathini, director of equity strategy at WealthMills Securities, has observed that while Chinese markets are also performing well, uncertainties surrounding US growth and potential trade tensions have led to a greater focus on emerging markets, particularly India.
Following a recent correction, Indian markets have bounced back from the Nifty’s 22,000 level. Currently, the mood in India is turning more positive. As long as the Nifty maintains the 23,000 level, Indian markets are expected to see solid performance in the short to medium term.
The positive trend is supported by encouraging economic indicators. Indian macroeconomic conditions are improving with strong tax revenues, allowing the market to maintain the 23,000 level, he explained.
Looking ahead, the upcoming quarterly results will be crucial, he added. The Q4 earnings season will play a key role in driving the markets and sustaining momentum above the 23,000 mark. Global factors, including trade tensions and geopolitical issues, will also continue to impact market movements alongside company earnings.
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