Indian equities thrive despite foreign sell-off

Despite foreign institutional investors (FIIs) net-selling over $3.5 billion worth of shares in 2024, Dalal Street remains vibrant, witnessing the Nifty reaching a new record high of 22,150.75. The buoyancy is attributed to robust retail inflows through mutual funds, with domestic institutions purchasing over Rs 43,000 crore worth of shares this year. High net-worth individuals maintain optimism, pouring record sums into mutual funds, particularly schemes focusing on mid and small-cap stocks.

While FIIs persist in selling, market experts suggest it could be influenced by benchmark indices trading above historical averages, making them appear expensive. Global investors, cautious about Chinese equities, find India increasingly attractive, given its 18% weightage in the MSCI Emerging Market index. Despite mixed Q3 earnings, resilient Nifty estimates and the anticipation of continued political stability and robust corporate earnings propel optimism.


Analysts foresee a parallel to last year, predicting FIIs may join the market surge or risk underperformance. Nomura India projects the Nifty hitting 24,260 by year-end, while Morgan Stanley envisions the Sensex reaching 74,000, reflecting confidence in India’s medium-term growth cycle.