FIIs Extend 15-Day Bull Run, Markets Steady Despite Operation Sindoor
Foreign Institutional Investors (FIIs) have maintained a strong presence in Indian equity markets, recording net purchases for the fifteenth consecutive trading session on May 7, 2025. This sustained inflow highlights investor optimism in India’s economic prospects and reflects the market’s maturity in absorbing geopolitical developments like Operation Sindoor without panic.
Sustained FII Buying: A Vote of Confidence
FIIs have been major contributors to the liquidity and performance of Indian stock markets. Their persistent buying streak, lasting over two weeks, sends a strong signal of global confidence in India’s macroeconomic stability and growth outlook. The recent sessions have witnessed considerable volumes pouring into sectors such as financials, infrastructure, capital goods, and technology.
These inflows are particularly noteworthy because they come at a time when other global markets are showing signs of weakness due to recessionary concerns, inflationary pressures, and ongoing geopolitical tensions in various regions.
No Ripple Effect from Operation Sindoor
The backdrop of this bullish trend includes the recent launch of Operation Sindoor — a strategic military move that had the potential to rattle investor sentiment. However, the Indian stock market displayed remarkable resilience. Major indices remained steady, and volatility was minimal, suggesting that investors are confident in the country’s ability to manage both external and internal challenges effectively.
Analysts believe that the muted response to Operation Sindoor is largely due to a shift in focus among investors. Rather than reacting sharply to military activity or international tensions, market participants are concentrating on domestic cues — earnings growth, political stability, reform momentum, and sector-specific resilience.
Robust Economic Fundamentals Behind Market Stability
India’s economic fundamentals have remained strong in recent quarters. Factors such as stable GDP growth, healthy foreign exchange reserves, manageable inflation, and improved tax collections have created a favorable environment for investment. Additionally, the government’s focus on infrastructure development and manufacturing has further improved investor sentiment.
Corporate earnings for the March quarter have also played a crucial role in keeping the markets buoyant. Strong performance across sectors such as banking, automobiles, consumer goods, and IT has reinforced investor confidence in the long-term profitability of Indian businesses.
Sectors Attracting Maximum Inflows
FIIs appear to be placing their bets on sectors that are likely to benefit from long-term structural reforms. Financial services, which are considered the backbone of the economy, have seen consistent inflows as banks report robust credit growth and improved asset quality.
The capital goods and infrastructure sectors are also witnessing renewed interest, driven by government initiatives in housing, transportation, and industrial development. Technology stocks, while more volatile globally, have remained attractive in India due to continued demand for digital solutions and IT exports.
Rupee Stability and Monetary Policy Supporting Inflows
Another factor contributing to this FII enthusiasm is the relative stability of the Indian rupee. Unlike some emerging markets that have faced currency depreciation, the rupee has held its ground thanks to proactive intervention by the Reserve Bank of India (RBI) and stable macroeconomic indicators.
India’s monetary policy, while maintaining a cautious stance on inflation, has remained accommodative enough to support growth. This balanced approach has created a conducive environment for long-term capital inflows, as global investors seek stability amid worldwide monetary tightening.
Short-Term Risks Remain, But Outlook Positive
While the current sentiment is positive, market experts caution that external risks still exist. These include volatility in oil prices, upcoming global central bank decisions, and any escalation of geopolitical tensions. However, the Indian market’s response to Operation Sindoor has shown that it is increasingly able to look past short-term noise and focus on fundamentals.
The upcoming general elections, scheduled for next year, will also be closely watched by investors. A stable political mandate is likely to further strengthen the bullish outlook, whereas a fragmented outcome could inject short-term uncertainty.
Conclusion
The Indian equity market’s ability to sustain investor interest despite geopolitical developments like Operation Sindoor underlines its growing maturity and global appeal. Fifteen consecutive sessions of net FII buying show that India continues to be viewed as a key investment destination in the emerging market space.
Strong macroeconomic indicators, robust corporate earnings, policy consistency, and political stability are working together to attract sustained foreign capital. While risks remain, the outlook for Indian markets in 2025 appears promising, driven by both global interest and domestic resilience.
The image added is for representation purposes only
