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Sensex, Nifty soar to a two-month high as FPIs ramp up buying activity

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In short

Strong foreign portfolio investment inflows, totaling ₹25,400 crore across 11 sessions, served as the primary engine for the recent equity surge. Crude oil prices provided additional relief to market participants by tumbling over 10% across two sessions to trade at $105 a barrel. However, market experts caution that continuing this upward trajectory will depend on crude stability and sustained macroeconomic improvements.

Key points

  • Global funds are actively diversifying into Indian equities as concerns regarding rupee d…: Global funds are actively diversifying into Indian equities as concerns regarding rupee depreciation begin to ease.
  • Declining crude oil prices, which dropped from $115 to $105 per barrel, have significantl…: Declining crude oil prices, which dropped from $115 to $105 per barrel, have significantly supported broader market sentiment.
  • Market analysts warn that sustained momentum requires ongoing stabilization in oil market…: Market analysts warn that sustained momentum requires ongoing stabilization in oil markets and continued economic progress.

Sources checked by our analysis pipeline: 1

The Sensex settled at 76,917.85, up 1.6%, or 1,226 points, from its previous close. The index closed at a level last seen on September 1. The Nifty 50 gained 1.6%, or 371 points, to 23,811, its highest close since September 4. Over the past four sessions, both benchmark indices have gained around 5%.

Concerns over the durability of the AI trade could have prompted some foreign investors to diversify into assets and markets such as Indian stocks, considered less vulnerable to any volatility triggered by AI unwinding. "Some global investors could also be diversifying away from large artificial intelligence-related investments following volatility in technology stocks. At the same time, the recent market correction has made Indian equities more attractive," said Utsav Verma, head of research, institutional equities, Choice Equity Broking. "There is also greater comfort on the rupee, with expectations of sharp depreciation having eased."

Read more: NSE Q2 Results: Profit jumps 23% to Rs 2,578 crore, revenue rises 9%

Foreign Portfolio Investors net bought ₹6,837 crore in Indian equities on Tuesday, while DII sold ₹3,679 crore, according to provisional…

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