After six consecutive weeks of losses, the Indian stock market finally witnessed a breather as the Nifty and Sensex closed with gains of around 1% last week. The rebound was largely driven by extreme oversold conditions and supportive global cues, although the overall momentum stayed muted due to persistent foreign outflows.
FII vs DII Activity
Foreign Institutional Investors (FIIs) continued their aggressive selling spree, offloading nearly ₹10,000 crore in the cash market. On the other hand, Domestic Institutional Investors (DIIs) emerged as strong buyers, absorbing the pressure with robust investments worth ₹19,000 crore.
The broader markets, too, staged a recovery with pharma and auto stocks leading the rally, while FMCG stocks lagged behind.
Key Triggers for the Coming Week
Market experts believe that a mix of domestic and global factors will dictate Dalal Street’s direction in the coming week. Here are the major triggers to watch out for:
1. GST Reforms
Prime Minister Narendra Modi’s Independence Day speech, highlighting new GST reforms, is expected to boost market sentiment, especially in sectors directly linked to consumption and manufacturing.
2. Global Geopolitics – Trump-Putin Alaska Meeting
While the Trump-Putin summit in Alaska ended with “progress but no deal”, investors remain cautious. Any escalation or new policy announcement, particularly regarding US tariffs on Indian exports, could weigh on sentiment.
3. US Fed Minutes
The upcoming US Federal Reserve meeting minutes will be closely tracked for clues on future rate hikes and monetary tightening, which could influence global liquidity flows and FII activity in India.
4. Monsoon Progress
With the monsoon season progressing favorably, rural demand is expected to improve, supporting sectors like FMCG, auto, and agri-linked industries.
5. Record Low Inflation in India
India’s inflation hitting a record low provides comfort to the RBI and strengthens expectations of a supportive monetary stance, which could further boost equity markets.
Sectoral Outlook
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Positive Bias: Pharma, Auto, Agri-linked sectors
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Watch Closely: Banking & Financials (dependent on FII flows)
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Lagging: FMCG (near-term demand concerns despite long-term strength)
Market Outlook
While the market has managed to snap its losing streak, volatility is likely to persist due to foreign outflows, global uncertainties, and policy-related triggers. Investors are advised to remain selective, focusing on fundamentally strong companies in pharma, auto, and consumption-linked sectors