Indian stock markets have reversed the 2025 losses in the final six buying and selling classes. Whereas BSE Sensex is marginally down from its December-finish closing, Nifty50 has turned constructive for the calendar yr 2025. Stock market investors’ wealth has risen by Rs 27.10 lakh crore in the final six buying and selling classes to Rs 4,18,29,351.91 crore ($4.87 trillion).
Since March 17, BSE Sensex has risen over 5.6% or 4,302.47 factors, whereas the broader 50-share index Nifty50 has additionally rallied over 5.6% or 1,261.15 factors. To place issues in perspective, BSE Sensex plunged 5.55% in February and 0.81% in January this yr. In March this yr, Sensex has risen 6.53% to this point.
Nifty50 Turns Optimistic For 2025
Amidst international turmoil and India’s GDP development slowdown and tight liquidity circumstances, Indian stock markets had been bleeding. Foreign investors had been promoting shares relentlessly, and for now that pattern appears to have reversed. But is the present stock market rally sustainable? Are foreign investors conclusively again on D-Street? Right here’s why market consultants are cautious:
Stock market rise in numbers:
- BSE Sensex and Nifty50 have rallied strongly in the final six buying and selling classes, but are nonetheless down round 10% from the document excessive they touched in late September 2024.
- Stock markets have seen a sturdy restoration in March 2025, with Nifty50 and BSE Sensex gaining practically 7% in the month to this point.
- Importantly,
Foreign Portfolio Investors (FPIs), which had been persistently promoting Indian equities for over 5 months now, have turned internet consumers in the three out of the final 4 buying and selling classes. - In accordance to a Reuters report, heavyweight financials, which FPIs have the highest publicity to, have been main the stock market rally. The index rose 2% on Monday, contributing 58% to the Nifty’s beneficial properties, the report stated.
Foreign investors again on D-Street – but is the rally sustainable?
Market consultants say that the stock market rally is pushed by bettering financial fundamentals – GDP development seems to be again on monitor, earnings are anticipated to enhance, inflation is cooling, and RBI is anticipated to lower charges additional in the April coverage evaluate, therefore offering a a lot-wanted liquidity increase. Specialists additionally recommend that investors are discount searching forward of the earnings season which can kick off in early April.
Siddhartha Khemka, Head – Analysis, Wealth Administration, Motilal Oswal Monetary Companies says that the constructive momentum is largely attributed to FPIs returning as consumers, coupled with opportunistic discount searching.
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“Additional, constructive information on cooling inflation (CPI inflation eased to seven-month low of 3.61% in February, down from 4.31% in January) and improved development in GDP (6.2% in Q3FY25, up from 5.4% in the earlier quarter) have bolstered market sentiment,” Khemka tells TOI.
Khemka cautions that the continuation of this rally will depend on a number of international and home elements together with readability on the US reciprocal tariffs slated to be imposed on India from 2nd April, the upcoming company earnings and foreign investor flows.
FPIs purchased Indian equities in three out of 5 buying and selling classes final week (internet: + Rs 6,000 crore for the week), nonetheless they’ve offered shares value over Rs 3 lakh crore since the indices peaked in September. “Due to this fact, it is too early to touch upon the sustainability of FII shopping for but the similar will largely depend upon secure financial circumstances, wholesome earnings development and improved valuations,” he provides.
Satish Chandra Aluri, Analyst, Lemonn Markets Desk believes that the Indian stock markets have had a ‘exceptional rebound’ in March until now. “Discount searching at decrease ranges and higher valuation, return of foreign investors amid softer greenback and decrease US yields and home macro-outlook getting higher, are the causes that will have factored in the rebound,” Aluri was quoted as saying by PTI.
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He is of the view that after promoting a document $29 billion in the final 5 months, foreign investors at the moment are displaying a renewed curiosity in Indian equities. “Foreign outflows have been a significant factor in latest corrections. Softer US greenback, after the Trump commerce struggle sparked issues over US development, additionally helped as capital moved from the US to Europe and EMs like India and so on,” he provides.
In accordance to Mehul Kothari, DVP – Technical Analysis, Anand Rathi Shares and Stock Dealer, the present stock market rally has sturdy momentum pushed by FII inflows, home financial enhancements, and sector-particular beneficial properties.
Nevertheless, he notes that its sustainability stays unsure due to international uncertainties and the want for earnings development to justify valuations.
“FIIs are again on Dalal Avenue for now, but their return is not but conclusive, as their conduct might shift with altering international dynamics. Investors ought to stay cautious, specializing in high quality giant-cap shares and monitoring international cues, somewhat than assuming this rally marks a definitive finish to 2025’s volatility,” Kothari tells TOI.
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