News

Foreign investors kicked off May on a strong note, extending their buying streak to a twelfth straight session on Friday with fresh equity purchases worth Rs 2,769 crore. After a heavy selloff in the first quarter of 2025, when FIIs dumped Indian stocks worth a staggering Rs 1.29 lakh crore, the tide appears to be turning. April marked a shift in sentiment, with foreign funds making a modest return as net buyers to the tune of Rs 3,243 crore. Provisional data also showed domestic institutional investors (DIIs) adding to the momentum with net purchases of Rs 3,290 crore on May 2.

During the trading session of May 2, FIIs bought shares worth Rs 18,130 crore and sold shares worth Rs 15,360 crore. DIIs purchased shares worth Rs 13,906 crore and sold shares worth Rs 10,615 crore.

For the year so far, FIIs have been net sellers of shares worth Rs 1.34 lakh crore, while DIIs have net bought Rs 2.10 lakh crore worth of shares.

Market Performance

The Indian stock market extended its winning run for a third straight week, marking its longest stretch of weekly gains since December 2024. Benchmark indices—the Sensex, Nifty, and Nifty Bank—each rose around 1 percent over the week, supported by strong performances in oil & gas and banking names.

Foreign institutional investors (FIIs) have turned sustained buyers in the Indian cash market over the past 11 trading sessions, pumping in Rs 37,375 crore. This sharp reversal in strategy is attributed to two key factors. First, former U.S. President Donald Trump’s announcement of a 90-day pause in reciprocal tariffs spurred a recovery in global equity markets, with India outperforming thanks to its strong growth prospects. Second, a significant slide in the U.S. Dollar Index—from 111 in early January to 99—reversed the earlier momentum trade favouring the U.S., making emerging markets, especially India, more attractive to global investors.

While FII inflows could remain steady in the near term, analysts caution that modest corporate earnings growth of around 5 percent in FY25 may limit their scale. Additionally, global and regional risks loom large. The ongoing trade war and rising tensions between India and Pakistan present unusual geopolitical risks not seen since the days around the Balakot airstrike. On the macro front, a potential rebound in the dollar, sluggish earnings recovery, and any escalation in cross-border conflict are seen as key headwinds that could dampen market sentiment.

On Friday, however, the indices ended on a mixed note, with midcaps underperforming larger peers. The Sensex closed 260 points higher at 80,502, and the Nifty added 13 points to end at 24,347. The Nifty Bank index edged up by 28 points to 55,115, but the Nifty Midcap 100 fell 420 points, or 1 percent, to 53,705. Weakness in midcaps was evident throughout the session, pulling the market breadth toward an even advance-decline ratio.

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