Indian inventory markets reverse 2025 losses! Bulls social gathering as international buyers return to D-Road – however is the rally sustainable?
Indian inventory markets have reversed the 2025 losses within the final six buying and selling periods. Whereas BSE Sensex is marginally down from its December-end closing, Nifty50 has turned constructive for the calendar yr 2025. Inventory market buyers’ wealth has risen by Rs 27.10 lakh crore within the final six buying and selling periods to Rs 4,18,29,351.91 crore ($4.87 trillion).
Since March 17, BSE Sensex has risen over 5.6% or 4,302.47 factors, whereas the broader 50-share index Nifty50 has additionally rallied over 5.6% or 1,261.15 factors. To place issues in perspective, BSE Sensex plunged 5.55% in February and 0.81% in January this yr. In March this yr, Sensex has risen 6.53% to this point.
Nifty50 Turns Constructive For 2025
Amidst world turmoil and India’s GDP development slowdown and tight liquidity circumstances, Indian inventory markets had been bleeding. Overseas buyers had been promoting shares relentlessly, and for now that pattern appears to have reversed. However is the present inventory market rally sustainable? Are international buyers conclusively again on D-Road? Right here’s why market consultants are cautious:
Inventory market rise in numbers:
- BSE Sensex and Nifty50 have rallied strongly within the final six buying and selling periods, however are nonetheless down round 10% from the document excessive they touched in late September 2024.
- Inventory markets have seen a strong restoration in March 2025, with Nifty50 and BSE Sensex gaining almost 7% within the month to this point.
- Importantly,
Overseas Portfolio Buyers (FPIs), which had been persistently promoting Indian equities for over 5 months now, have turned web consumers within the three out of the final 4 buying and selling periods. - Based on a Reuters report, heavyweight financials, which FPIs have the best publicity to, have been main the inventory market rally. The index rose 2% on Monday, contributing 58% to the Nifty’s good points, the report mentioned.
Overseas buyers again on D-Road – however is the rally sustainable?
Market consultants say that the inventory market rally is pushed by bettering financial fundamentals – GDP development seems to be again on observe, earnings are anticipated to enhance, inflation is cooling, and RBI is anticipated to chop charges additional within the April coverage evaluate, therefore offering a much-needed liquidity enhance. Consultants additionally recommend that buyers are discount searching forward of the earnings season which can kick off in early April.
Siddhartha Khemka, Head – Analysis, Wealth Administration, Motilal Oswal Monetary Companies says that the constructive momentum is essentially attributed to FPIs returning as consumers, coupled with opportunistic discount searching.
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“Additional, constructive information on cooling inflation (CPI inflation eased to seven-month low of three.61% in February, down from 4.31% in January) and improved development in GDP (6.2% in Q3FY25, up from 5.4% within the earlier quarter) have bolstered market sentiment,” Khemka tells TOI.
Khemka cautions that the continuation of this rally will depend on a number of world and home components together with readability on the US reciprocal tariffs slated to be imposed on India from 2nd April, the upcoming company earnings and international investor flows.
FPIs purchased Indian equities in three out of 5 buying and selling periods final week (web: + Rs 6,000 crore for the week), nonetheless they’ve bought shares price over Rs 3 lakh crore for the reason that indices peaked in September. “Due to this fact, it’s too early to touch upon the sustainability of FII shopping for however the identical will largely rely upon steady financial circumstances, wholesome earnings development and improved valuations,” he provides.
Satish Chandra Aluri, Analyst, Lemonn Markets Desk believes that the Indian inventory markets have had a ‘exceptional rebound’ in March until now. “Cut price searching at decrease ranges and higher valuation, return of international buyers amid softer greenback and decrease US yields and home macro-outlook getting higher, are the explanations that will have factored within the rebound,” Aluri was quoted as saying by PTI.
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He’s of the view that after promoting a document $29 billion within the final 5 months, international buyers at the moment are exhibiting a renewed curiosity in Indian equities. “Overseas outflows have been a significant factor in current corrections. Softer US greenback, after the Trump commerce struggle sparked issues over US development, additionally helped as capital moved from the US to Europe and EMs like India and so on,” he provides.
Based on Mehul Kothari, DVP – Technical Analysis, Anand Rathi Shares and Inventory Dealer, the present inventory market rally has sturdy momentum pushed by FII inflows, home financial enhancements, and sector-specific good points.
Nevertheless, he notes that its sustainability stays unsure resulting from world uncertainties and the necessity for earnings development to justify valuations.
“FIIs are again on Dalal Road for now, however their return just isn’t but conclusive, as their habits might shift with altering world dynamics. Buyers ought to stay cautious, specializing in high quality large-cap shares and monitoring world cues, reasonably than assuming this rally marks a definitive finish to 2025’s volatility,” Kothari tells TOI.
