FII outflows in India markets continue this week amid escalating global tensions

Mumbai, July 25 (IANS) Foreign institutional investors (FIIs) continued to remain net seller in the Indian stock markets this week, offloading Rs 7,180 crore based on provisional exchange data.

On the other hand, domestic institutional investors (DIIs) were net buyers, purchasing Rs 8,640 crore this week.

“Foreign Institutional flows are likely to remain volatile until there is greater clarity on the geopolitical situation and sustained stability in crude oil prices, which will be key to restoring investor confidence and improving the outlook for equity markets,” said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.

Benchmark Indices witnessed sharp decline this week as escalating geopolitical tensions, surging crude oil prices, persistent tariff uncertainty, and the Indian rupee weakening close to its record low against the US dollar weighed heavily on investor sentiment.

Rising oil prices pose a significant risk to economic stability by fuelling inflation, increasing input costs, and putting pressure on corporate profit margins and near-term earnings expectations.

Nifty started the week on a negative note and dragged lower as the week progressed to close lower for all the five sessions during last week. Nifty closed the week at 23,767.5 levels, down by 2.3 per cent.

Vinit Bolinjkar, Head of Research, Ventura, said that the trading week concluded under intense geopolitical duress, with Brent crude surging past the psychological $100 mark to settle at $100.40 per barrel amid escalating US-Iran conflict risks.

“While the USD/INR held near 96.55 and domestic retail liquidity remains robust, surging energy costs and persistent supply-chain fears have heightened volatility. Markets will closely eye upcoming corporate earnings and defensive allocation strategies to weather near-term macro headwinds,” he mentioned.

In the coming week, investors will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions.

Additionally, the Q1 FY27 earnings season will continue to be in focus, said analysts.

—IANS

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