Indian markets have been range-bound in 2025, with foreign investors pulling out nearly ₹2 lakh crore so far. Kranthi Bathini, Equity Strategist at WealthMills Securities, explains what could bring FIIs back to Indian markets and what to expect next week.
Excerpts:
Q. After the recent rebound, do you see this as the start of a sustainable rally or just a technical bounce?
Kranthi Bathini: Overall, the broader market, especially the headline indices, is in a consolidation phase at higher levels. A fortnight ago, we were above 25,500, then witnessed a decline to around 24,600. From there, buying interest is returning. Right now, the market is range-bound, with a “buy on dips, sell on rallies” sentiment. Technical formations show lower tops and lower bottoms, which may test the patience of long-term investors. The range-bound nature is creating repetitive buying and selling activity, making the market appear boring and tiring for some investors.
Q. With FIIs selling about Rs 2 lakh crore so far in 2025, how critical are these flows, and can domestic buying offset them?
Kranthi Bathini: Retail and domestic institutional investors (DIIs) have done a commendable job cushioning the market. Without them, FII outflows would have caused a bearish scenario. For a sustained bull market, we need both DIIs and FIIs. The current lack of follow-on buying at higher levels is due to geopolitical issues, valuation concerns, and tariff-related worries.
Q. What could bring FIIs back into the Indian market?
Kranthi Bathini: Two things are very important to bring back FII interest: corporate earnings and a positive update on the trade deal between India and the US. FIIs are in a wait-and-watch mode. Short-term concerns like tariffs and a weakening rupee create discomfort, even though India’s domestic growth story and macro fundamentals remain strong. Government reforms, GST 2.0, and relaxed lending norms offer comfort, but these need to translate into earnings. Once corporate earnings pick up, foreign investors’ confidence should improve, potentially fueling a sustained bull case.
Q. Let’s talk about risks like the rupee, US rates, oil prices, and the US government shutdown. How exposed is the Indian market?
Kranthi Bathini: Rupee weakness may weigh on sentiment, though exporters benefit. Tariff worries affect some export-oriented companies. The US shutdown is unlikely to have a major market impact, but it could boost precious metals like gold and silver, which have already rallied this year.
Q. What should investors expect in the next week for Nifty?
Kranthi Bathini: The market remains a “buy on dips, sell on rallies” scenario. Nifty is around 24,825. Sustaining above 25,000 is crucial for a medium- to short-term bull case. If the market holds this level, the direction turns positive. If it struggles below 25,000, selling pressure and shorts could continue, keeping the market range-bound.
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