Recent data shows foreign institutional selling slowed after touching nearly $8.8 billion between mid-September and mid-October. This easing coincides with a 6% dollar-term gain in domestic equities since October 8, running ahead of tech-heavy markets like the Nasdaq. Robust earnings have supported sentiment, with normalized profit after tax across 134 tracked BSE 200+ companies rising 34% year-on-year. Furthermore, most sectoral valuations have retreated below post-pandemic averages, creating a viable entry point for global investors.
Key points
Strong corporate earnings beats in power, metals, and pharmaceuticals are counteracting s…: Strong corporate earnings beats in power, metals, and pharmaceuticals are counteracting softer demand in autos and chemicals.
Valuations falling below post-pandemic historical averages could soon push the Nifty beyo…: Valuations falling below post-pandemic historical averages could soon push the Nifty beyond its March 2027 target of 24,000.
Analysts warn that profit growth may decelerate to 3% in late FY27 alongside risks from e…: Analysts warn that profit growth may decelerate to 3% in late FY27 alongside risks from elevated interest rates and geopolitical tensions.
Sources checked by our analysis pipeline: 1
FIIs sold around $5 billion in the fortnight ended Oct. 15, their heaviest fortnightly outflow in 12 fortnights, taking cumulative net selling since Sept. 15 to about $8.8 billion. However, the pace of selling has eased over the past 15 days.
The shift comes as India’s earnings cycle begins to deliver a stronger signal. Of the 134 companies in Nomura’s BSE 200+ universe that had reported results, normalised profit after tax rose 34% from a year earlier, beating consensus estimates by 18%. Excluding oil and gas, normalised profit growth stood at 29%, still 5% ahead of expectations.
“The aggregate print is strong, but the distribution is not,” Nomura said, noting that the number of earnings beats and misses was broadly even.
Oil and gas, power and coal, metals, infrastructure and pharmaceuticals reported results ahead of consensus, while consumer staples, automobiles and chemicals missed estimates. The earnings recovery following the fiscal and monetary stimulus of 2025 has also been stronger than the Street expected, according to Nomura.
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