New Delhi. The pressure that has been there for a long time in the Indian stock market now seems to be gradually easing. The same trend which spoiled the market movement in 2025, is now showing signs of reversal. The recovery of the market and the strengthening of the rupee in recent trading sessions have brought back some investor confidence. Analysts believe that this change is not just a short-term relief, but behind it there is strong support from macro economy and earnings. Improvement in GDP growth, strength in corporate results and currency stability are such factors which can attract foreign investors towards the Indian market again.
During the year 2025, foreign institutional investors made a total net sale of Rs 230964 crore through the exchange. Due to this continuous pressure, the market remained weak for a long time and the sentiment remained negative.
Change in trend in cash market
After prolonged selling, foreign investors bought in the cash market in recent sessions. In the last 3 trading days, FIIs registered net purchases of Rs 3596 crore, which provided support to the market from below.
Sentiment improved due to strengthening of rupee
Analysts say that the strengthening of rupee has supported FII sentiment to a great extent. Currency stability provides assurance to foreign investors that returns earned in equities will not be eroded by currency losses.
Why are analysts looking for trend reversal?
According to VK Vijayakumar, Chief Investment Strategist of Geojit Investments, there are clear signs of reversal of FII outflows. He believes that improvement in GDP growth and earnings uptrend in the coming quarters can make foreign investors net buyers again.
Confidence remains in the primary market
Despite the selling in the secondary market, the confidence of foreign investors remained in the primary market. In recent months, foreign investment has been seen continuously through IPO and other issues, which shows long term confidence.
Why did the weakness of rupee increase the pressure?
Rupee weakness further intensified FII selling during 2025. As currency risks increased, foreign investors gave priority to capital protection, which created additional pressure on the equity market.
Earnings give hope for recovery
Many sectors have registered double digit earnings growth in recent quarters. The strength of sectors like hospitals, capital goods, cement, electronics manufacturing, ports, NBFC and telecom has laid the foundation for the market’s recovery.
