New Delhi, March 22: Analysts report that Indian equity markets are demonstrating “structural strength” despite intense global macroeconomic pressures and withdrawals by foreign institutional investors (FIIs).
For the week ending March 20, a persistent ‘risk-off’ sentiment was observed among FIIs, resulting in a weekly net withdrawal of ₹29,718.9 crore. This significant outflow, coupled with a surge in the US dollar index, placed pressure on the Indian rupee, which temporarily dipped to a record low of 93.71.
Vineet Bolinjkar, head of research at Ventura, noted, “Interestingly, the Nifty maintained its strength, closing at 23,114.50 (+0.49 percent), as domestic institutional investors (DIIs) played a strong balancing role with a net weekly purchase of ₹30,269.23 crore.”
The market ended the week with a nearly flat trend, reflecting caution among investors. The first three sessions were positive, but a sharp decline on Thursday erased gains, leading to volatility in the final session.
Consequently, the Nifty fell by 0.16 percent to close at 23,114.50, while the Sensex saw a slight decline of 0.04 percent, settling at 74,532.96.
Market sentiment received some support from the partial resumption of ship movements through the Strait of Hormuz in the early sessions.
Ajit Mishra, SVP of research at Reliance Broking, stated, “However, increased geopolitical tensions following Israel’s attacks on Iran’s energy infrastructure have pushed crude oil prices back to recent highs of nearly $119 per barrel. Although prices softened slightly afterward, they remain elevated.”
Additionally, the ongoing weakness of the rupee against the dollar and particularly weak global signals from the US have added to the pressure.
This trend was clearly reflected in the continuous outflow of FIIs throughout the week.
Given the weak investor sentiment, ongoing FII withdrawals, and global uncertainties, analysts recommend that investors adopt a cautious and selective strategy. They suggest focusing on large-cap stocks with strong fundamentals and stable income sectors.
Due to tensions in West Asia, Brent crude has been fluctuating around $107 per barrel, while the India VIX stabilizing at 22.81 indicates that a base is forming in the market.
Market experts predict, “We expect the market to remain within a limited range of 22,800 to 23,300, with a positive outlook only possible if global energy prices stabilize and currency fluctuations decrease.”
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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