The optimistic new market mood and the impressive GDP numbers warrant a change in foreign institutional investors’ (FIIs) strategy going forward, according to analysts.
There is no evidence of a trend reversal in FPI flows. FIIs were buyers in some days and sellers in some other days recently.
This is an indication that FII flows may change when the circumstances change. Up to November 29, FIIs sold equity for Rs 15,659 crore and bought equity for Rs 11,894 crore through the primary market.
“There are indications of changes. On November 27, both Nifty and Sensex set new records after a long wait of 14 months. Improved corporate earnings in Q2 and prospects of further improvements in Q3 and Q4 have buoyed up the sentiments. The consensus market view is that 15 to 16 per cent earnings growth is achievable in FY27,” according to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
The Q2 GDP growth at 8.2 per cent has surpassed all estimates by a wide margin. This smart pick up in growth despite US President Donald Trump tariffs indicates a robust economy which can deliver around 7.2 per cent growth in FY26.
“The standout performance is the 9.1 per cent growth in manufacturing and the 7.3 per cent growth in Gross Fixed Capital Formation. The 7.9 per cent growth in consumption expenditure indicates revival of consumption, which, in turn, can revive investment demand in the economy,” said Vijayakumar.
Meanwhile, markets extended their winning streak for the third successive week and scaled new record highs, supported by improving global risk sentiment and constructive domestic cues. While early sessions saw bouts of profit-taking, sharp rebound midweek restored bullish momentum, followed by healthy consolidation. By the end of the week, the Nifty gained 0.52 per cent to 26,202.95, and the Sensex advanced 0.56 per cent to 85,706.67.
“Broader market sentiment has improved, but participation remains selective. Midcaps exhibit relative strength, while Smallcaps remain prone to profit-taking. Institutional demand continues to guide leadership within sectors,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
