Key Highlights

  • Weekly gains: Nifty rose 2 per cent this week to close at 23,053. Sensex gained 1.83 per cent and ended at 74,459.
  • Foreign money returns: FIIs net bought Rs 6,304.67 crore worth of shares during the week, and DIIs added Rs 3,109.79 crore.
  • Broader market led: Nifty Smallcap100 jumped 4 per cent and Nifty Midcap100 rose 2.69 per cent.
  • Crude remains a risk: Brent ended the week near $117 a barrel as West Asia tensions flared again.
  • Levels to watch: Nifty faces resistance at 23,175–23,285, with support at 22,750–22,800.

For most of 2026, foreign investors have been selling Indian stocks. This week, they turned buyers, and the market responded.

Indian equity benchmarks recovered nearly 2 per cent over the week, supported by renewed buying from foreign institutional investors (FIIs), easing bond yields and encouraging domestic earnings. Nifty gained 2 per cent for the week and rose 0.51 per cent on the last trading day to close at 23,053. Sensex ended Friday 308 points, or 0.42 per cent, higher at 74,459, taking its weekly gain to 1.83 per cent.

The biggest signal was in the flows. FIIs net bought Rs 6,304.67 crore worth of shares during the week, while domestic institutional investors (DIIs) added Rs 3,109.79 crore. That matters because of what came before it. Foreign funds pulled a record Rs 1,17,775 crore out of Indian equities in March alone, and by May their total withdrawals for the year had crossed Rs 2.22 lakh crore, driven by the West Asia conflict, high oil prices and a weaker rupee. Against that background, one strong week of buying is a meaningful change in tone, even if it is too early to call it a trend.

"Indian equities closed the week higher as softer crude oil prices and easing bond yields revived risk appetite. While the Fed, ECB and BoJ kept rates unchanged as expected, their continued caution on inflation kept hopes of early monetary easing in check," an analyst said.

Smaller stocks did most of the running. Nifty Smallcap100 advanced 4 per cent and Nifty Midcap100 added 2.69 per cent, both clearly ahead of the large-cap benchmarks. Pharma and healthcare stocks led the gains on the back of positive earnings, while real estate benefited from softer bond yields. Metals, FMCG and autos rose on expectations of lower input costs. Cement and oil & gas were the main laggards.

The Crude Problem Hasn't Gone Away

The rally lost some steam towards the weekend. Renewed tensions in West Asia pushed crude prices higher and triggered profit booking in the broader market, although the benchmarks held on to their weekly gains. Brent ended the week near $117 a barrel, and investors will closely watch the upcoming OPEC+ review for any sign of a supply response.

For India, which imports most of its oil, this remains the biggest risk. High crude prices feed into inflation, the current account deficit and company margins, which are the same pressures that drove foreign money away earlier this year.

At home, manufacturing and services PMI data will show whether business activity can hold up despite high energy costs and tighter financial conditions. Globally, US PMI and jobs data and the outcome of the US midterm elections are expected to shape risk appetite, while Q2 earnings will drive stock-specific moves.

On the charts, analysts see immediate resistance for Nifty at 23,175–23,285 and support at 22,750–22,800. Bank Nifty needs to close above 55,150 to strengthen the bullish outlook, with 53,780 as crucial support.

The takeaway for investors is simple. Foreign buyers are back for now, but how long they stay will depend more on oil prices than on anything happening on Dalal Street.

(With inputs from IANS)