Foreign institutional investors (FIIs) could make a comeback to Indian equities as their positioning in the market stands at record underweight levels, while resilient domestic demand and healthy growth prospects for the broader market could support equities going forward, Mihir Vora, chief investment officer at Trust Mutual Fund said.
Vora told NDTV Profit that he was not very concerned about Indian market valuations, adding that the broader market could sustain healthy growth in the future.
He noted that India's inherent demand remains healthy despite inflationary pressures, elevated oil prices and tariffs, with demand holding up well.
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However, investors need to adopt a stock-specific approach, Vora said, pointing to the sharp correction in banking and non-banking financial company (NBFC) stocks in the past.
On the sectoral front, Vora said the IT sector's outperformance was largely due to a relatively limited decline, rather than strong growth prospects. IT services continue to be a mediocre growth sector, he added.
Vora also flagged potential headwinds for hospital stocks following the Supreme Court's scrutiny of drug pricing, which could have a negative impact on hospitals' profit after tax (PAT).
He noted that FY27 has started against a high base from the previous year. However, demand remains resilient despite inflationary pressures, while global economies are also witnessing good demand.
India has handled elevated oil prices and tariffs relatively well, Vora said.
FIIs Sell Indian Equities; DIIs Provide Support
Despite sustained foreign investor selling, domestic institutional investors (DIIs) have continued to provide support to Indian equities. FIIs have net sold shares worth Rs 44,649.56 crore across the nine trading sessions listed for October so far, from October 1 to October 14.
In contrast, DIIs have been net buyers in every session during this period, purchasing equities worth a cumulative Rs 48,510.02 crore. This leaves domestic institutional investors with net purchases exceeding FII outflows by Rs 3,860.46 crore, highlighting the role of domestic flows in cushioning foreign investor selling. On October 14 alone, FIIs recorded net outflows of Rs 1,857.44 crore, while DIIs bought shares worth Rs 2,670.44 crore.
Sensex, Nifty Rally Over 1.5%; Nifty Nears 23,000
Indian equity benchmarks rallied sharply on Thursday. The BSE Sensex surged 1.71%, or 1,246.81 points, to an intraday high of 74,028.70, while the Nifty 50 climbed 1.59%, or 360.65 points, to 22,983.35, approaching the psychologically important 23,000 mark.
At 12:21 pm, the Sensex was up 1.69% at around 74,008, while the Nifty 50 gained 1.53% to trade at 22,969.55, with both indices holding near their intraday highs.
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