Mumbai: Foreign money has turned back towards India just as the global trade in artificial intelligence stocks begins to wobble. Foreign portfolio investors bought a net Rs 38,971 crore of Indian equities in the week, according to NSDL data.
Gross purchases in the week stood at Rs 1.42 lakh crore, against gross sales of Rs 1.03 lakh crore. The net figure is the difference between the two. Reports on the flows put the month-to-date number higher still.
What pushed the money back is the other half of the story. AI-linked stocks globally have fallen about 13.4 per cent over the past month, which set off profit-taking in that trade and pushed money towards emerging markets. India's earnings outlook for the coming year is also being read as better than it was a quarter ago.
The benchmark moved with the flows. The Nifty rose 493.75 points, or 2.01 per cent, to close Friday at 25,030.35, its first close above 25,000 since the West Asia conflict began. The Sensex added 1,718.01 points, or 2.17 per cent, to end at 81,028.02. Both have now gained for seven straight sessions.
Analysts also point to expectations of a rate cut in the United States and a softer dollar, both of which make emerging market assets more attractive. Crude prices easing from their highs have helped India's case, since the country imports most of the oil it burns.
None of this is a promise. Foreign flows follow global risk appetite, and that appetite can turn in a week. A fresh escalation in West Asia, or a US rate path that disappoints, would send the money back out as quickly as it came.
For the domestic market, the number is a relief. Months of foreign selling had kept the benchmarks under pressure even as domestic institutions bought. With buyers back, Samvat 2083 opens on a firmer footing.
The exchanges hold their one-hour Muhurat session on Sunday. Traders expect thin volumes rather than a directional call.