Did Indian Stock Markets Stage a Sharp Rebound This Week with FII Buying?
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Synopsis
This week, the Indian stock markets witnessed a significant turnaround after a five-week consolidation phase. With foreign institutional investors returning to the market and easing geopolitical tensions, the indices surged, reflecting a renewed investor confidence.
Key Takeaways
- Indian stock markets ended a five-week consolidation.
- FII inflows surged, with over Rs 12,000 crore in a single day.
- Indices reached a nine-month high.
- Geopolitical tensions in the Middle East eased.
- Investor confidence is on the rise.
Mumbai, June 28 (NationPress) The Indian stock markets have successfully concluded a challenging five-week consolidation period, driven by a resurgence in global sentiment, diminished geopolitical worries, and significant purchases by foreign institutional investors (FIIs) during the week's latter half, analysts stated on Saturday.
After a tentative beginning, the indices gained momentum midweek as tensions between Iran and Israel showed signs of relief, restoring global risk appetite.
As a result, the benchmark indices Nifty and Sensex finished near their weekly peaks at 25,637.80 and 84,058.90, respectively.
“The surge was supported by a blend of easing Middle Eastern tensions and a robust increase in FII inflows. The fragile ceasefire between Iran and Israel remained intact throughout the week, calming geopolitical nerves and enhancing investor confidence,” commented Ajit Mishra, SVP, Research, Religare Broking Ltd.
On the domestic side, advancements in the monsoon, lower crude oil prices, and stable macroeconomic indicators bolstered the bullish sentiment. FII inflows intensified, with over Rs 12,000 crore injected in a single day, further amplifying market sentiment, he added.
On Friday, the benchmark indices hit a nine-month high. The Sensex rose by 303.03 points, or 0.36 percent, closing at 84,058.90. It fluctuated within a range of 83,645.41 to 84,089.35 throughout the day.
This indicates that investors are growing increasingly confident about market stability in the near future.
A majority of sectors participated in the upswing, with metals leading the charge, followed by finance, energy, and banking. IT stocks also saw a recovery, concluding flat, aided by bargain hunting and favorable global signals.
Conversely, the real estate sector experienced profit-taking amid ongoing consolidation and ended slightly lower. Interestingly, broader indices attracted considerable buying interest, reflecting a risk-on sentiment, gaining between 2.4 percent to 4.3 percent over the week, as per market experts.
According to Vinod Nair, Head of Research, Geojit Investments Limited, Indian equity benchmarks made a significant comeback this week, overcoming initial volatility to finish strongly.
“The rally was anchored by reduced geopolitical tensions in the Middle East and a sharp drop in crude oil prices, which lifted investor sentiment across various sectors. Broad-based buying propelled the indices, although gains were moderated by underperformance in the IT sector,” he noted.
As the first-quarter earnings season approaches, investors are shifting their focus to corporate results for early signs of growth trends. There is also rising anticipation surrounding trade agreements that the United States is expected to finalize with major global partners in the upcoming week.
Looking ahead, global cues will continue to dictate market direction. Despite the improved sentiment, caution remains concerning potential tariff escalations, with U.S. tariffs set to resume from July 9, and updates on trade agreements will remain in the spotlight.
Domestically, high-frequency data such as IIP and PMI figures will be under scrutiny, alongside monsoon progress and FII activity, to assess short-term market trends, according to experts.
Point of View
I observe that the recent rebound in the Indian stock markets showcases resilience amid global uncertainties. The influx of foreign institutional investment, coupled with easing geopolitical tensions, indicates a positive shift in investor sentiment. However, it is crucial for stakeholders to remain vigilant as market dynamics evolve.
NationPress
28/06/2025
Frequently Asked Questions
What factors contributed to the rebound in Indian stock markets?
The rebound was primarily driven by improving global sentiment, reduced geopolitical tensions, and significant foreign institutional investor buying.
How did the indices perform this week?
The benchmark indices Nifty and Sensex closed near their weekly highs, with the Sensex climbing by 303.03 points.
What sectors experienced growth during this period?
Metals led the gains, followed by financials, energy, and banking, while IT stocks also saw a slight recovery.
What should investors focus on moving forward?
Investors should pay attention to upcoming corporate earnings, international trade agreements, and high-frequency economic data.
What is the outlook for the Indian stock market?
The market outlook appears positive, but caution is advised due to potential tariff escalations and ongoing geopolitical risks.
