At a time when market commentary is increasingly driven by quick takes and convenient explanations, veteran investor Shankar Sharma, who founded First Global, a notable financial services company, in 1994, and later ventured into GQuant Investech in 2015, offers a sharp pushback, rooted not in opinion, but in data.

His central argument is straightforward: popular narratives around why foreign investors are avoiding India, be it the lack of AI exposure or tax concerns, do not stand up.

One of the dominant claims doing the rounds is that foreign investors are favouring markets with strong AI exposure, leaving India behind. But a look at global market performance tells a very different story.

As per the data, several markets with little to no AI ecosystem have significantly outperformed. South Korea’s KOSPI Index has delivered a staggering 149.6% one-year return, while Taiwan’s TAIEX Index is up 96.6%. Even markets like Vietnam (74%), Brazil (59.1%), Japan (49.9%), and Pakistan (47.7%) have posted strong gains.

In contrast, the US, widely seen as the epicentre of AI, does not dominate the rankings. The NASDAQ 100 shows a 40.3% one-year return, while the S&P 500 stands at 29.4%, placing it well below several non-AI-heavy markets.

The takeaway is clear: market performance is not exclusively tied to AI exposure. India’s underperformance, as shown in the same dataset, is stark. The Nifty 50 has declined 12.1% over one year, while the Sensex is down 14.5%. Even the broader Nifty 500 has fallen 8.2%.But Sharma points out a critical inconsistency in the prevailing narrative. India has never been a tech-heavy market, and yet it delivered strong returns over the past two decades. If tech was not the driver then, it is difficult to argue that its absence is the reason now.

Another widely cited explanation is that taxation has driven foreign investors away. Here again, Sharma turns to data.

The correlation between net FII investment and Sensex returns stands at just 0.15 since 1999, indicating a weak relationship.

More importantly, the data shows that markets have risen and fallen across periods of both strong inflows and significant outflows. For instance, despite large negative FII flows in certain years, market returns have still been positive, and vice versa. Over the last 10 years, even with cumulative FII outflows of Rs -2,93,317 crore, the market has delivered a 226% return.

The implication is clear: FII flows and taxation alone do not explain market direction.

Markets across the world have delivered strong returns irrespective of AI exposure. India’s own historical performance contradicts the idea that tech is a prerequisite for success. And the relationship between FII flows and market returns remains weak at best, he said on microblogging site X, formerly Twitter.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares of Force Motors declined 5.66% to Rs 19,799 during Thursday’s trading session after the company reported a sharp drop in its fourth-quarter earnings for FY26.

The company posted a consolidated net profit of Rs 278.5 crore for Q4FY26, marking a 36% year-on-year (YoY) decline from Rs 434.7 crore in the same period last year. On a sequential basis, profit also fell 31% compared to Rs 406.1 crore reported in the December 2025 quarter.

Revenue grew modestly, with consolidated revenue from operations rising 8.2% YoY to Rs 2,549.8 crore from Rs 2,356 crore in Q4FY25. However, higher costs weighed on profitability, as total expenses climbed to Rs 2,210.3 crore, up 5% YoY and 21% quarter-on-quarter, driven largely by increased raw material and other expenses.

The company’s board has recommended a dividend of Rs 50 per equity share (500%) for FY26, subject to shareholder approval at the upcoming Annual General Meeting.

On a full-year basis, Force Motors delivered a strong performance. Consolidated net profit surged 51% to Rs 1,211.6 crore in FY26, compared to Rs 800.7 crore in FY25, while annual revenue climbed 12% to Rs 9,057 crore.

Stock performance and technical indicators

Over the past year, the stock has rallied approximately 120%, taking its market capitalisation to around Rs 26,417 crore. It has touched a 52-week high of Rs 26,450 and a low of Rs 8,745.

From a technical perspective, Trendlyne data shows the stock’s 14-day Relative Strength Index (RSI) at 47.1, indicating a neutral zone (below 30 is considered oversold and above 70 overbought). The stock is currently trading below six out of eight key simple moving averages (SMAs), though it remains above its 150-day and 200-day SMAs, suggesting a mixed trend with a slight bearish bias.

Shareholding pattern

Foreign Institutional Investors (FIIs) marginally increased their stake in the March 2026 quarter to 10.93% from 10.46%. Meanwhile, mutual fund holdings also edged up to 0.98% from 0.95%, reflecting steady institutional interest.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Foreign institutional investors (FIIs) quietly increased their exposure to Suzlon Energy in the March quarter, even as they pulled out more than Rs 1 lakh crore from Indian equities during the same period. FIIs raised their stake in the renewable energy company by about 1.68 crore shares sequentially. Their holding stood at 3,07,46,15,640 shares, or 22.42%, at the end of the March quarter, compared with 3,06,32,23,175 shares, or 22.34%, in the December quarter.

The incremental buying comes at a time when Suzlon’s stock has corrected around 12% so far this year, following a sharp rally over the past two years that turned it into a multibagger after its turnaround phase.

The FII move stands out against the broader trend of foreign outflows, suggesting selective accumulation in companies where growth visibility remains intact despite near-term market volatility.

Operationally, Suzlon has delivered decent numbers in the recent past. The company reported a 15% year-on-year rise in consolidated profit to Rs 445 crore in the December quarter, while revenue jumped 42% to Rs 4,228 crore, reflecting robust execution and order conversion.

Street expectations remain strong heading into the March quarter. JM Financial estimates Suzlon could report a 51% year-on-year jump in revenue to Rs 5,708 crore, with EBITDA seen rising 54% to Rs 1,068 crore and net profit expected to grow 53% to Rs 888.8 crore.

Brokerage views also remain constructive on the longer-term outlook. Systematix highlights Suzlon’s leadership in India’s wind energy market with around 35% share in installations and a strong order book of 6.5 GW, which provides visibility for sustained growth. The company’s integrated model spanning manufacturing, EPC and operations and maintenance is seen supporting recurring revenue streams and margin expansion.

Suzlon’s improving balance sheet is another key positive. After years of high leverage, the company has strengthened its financial profile through deleveraging and better working capital management, enabling it to bid for larger renewable energy projects.With India accelerating its renewable energy push, particularly in wind capacity addition, Suzlon remains well placed to benefit from sector tailwinds. The recent FII buying, despite broader market selling, suggests institutional investors may be positioning for that next phase of growth.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Mumbai: Foreign institutional investors (FII) withdrew more than ₹1.6 lakh crore from Indian equities in FY26 – the highest in a financial year – although a record ₹8.5 lakh crore of fresh commitments from domestic funds formed the ideal rearguard against the potentially debilitating FII exits through the worst rupee rout in 14 years.

For overseas buyers, Indian risk assets in FY26 appeared to have been caught in the perfect storm due to the Iran conflict, a lingering uncertainty on tariffs, relatively expensive valuations, an AI-led decline in the business prospects of a $280-billion technology industry, and about 10% rupee slide against the dollar.

FY26 marks the second consecutive financial year of FII outflows and fourth in the previous five years, data from ETIG showed. Last year, FIIs withdrew ₹1.24 lakh crore from stocks and were on track to pull out a similar amount this fiscal year too. But their pace of exit accelerated in March after the start of the Iran war, with the rupee losing 4% in as many weeks. “Since March, the West Asia war raised risk-off sentiment that amplified the sell-off substantially,” said Rupen Rajguru, head, equity investment and strategy, Julius Baer India.

Domestic Appetite
“The weak currency is a big factor that eats into the returns of foreign investors and keeps foreign capital at bay this year,” said Rajguru.

Flows from domestic institutions – led by mutual funds, pension funds and insurers – into the stock market have been on an uptrend in the past five years. Their FY26 investments of ₹8.49 lakh crore exceeded total flows into equities in the previous two financial years, underscoring the domestic appetite for stocks despite the market sell-off.

Nifty and Sensex fell 5.1% and 7.1%, respectively, in the fiscal year. Both indices would have ended marginally higher or with modest losses but for the near 9.5% retreat in March – the worst monthly fall since 2020, the onset of the pandemic.

“Typically, one year of losses triggers domestic outflows, but this time, SIP (systematic investment plan) flows have remained largely steady despite 18 months of losses,” said Rajguru.

Retail investors have pumped ₹29,000 crore every month on average into domestic equity schemes in the past financial year. The return of foreign portfolio flows into India in the new financial year would depend on stability in the rupee, peace in West Asia and a decline in crude prices though a rush of overseas investments seem unlikely.

“Given the uncertainties arising out of the war on energy disruption and global reversal of interest rate cycle, the FPI flows are not expected to be positive immediately in the near future,” said Rajesh Iyer, managing director, global investment solutions and asset management, at LGT Wealth India.

Foreign institutional ownership of Indian companies is at a decadal low, and valuations are around 17 times the estimated price-to-earnings (PE) ratio, below the ten-year average, said Rajguru of Julius Baer India. “A lot of the damage is already done,” he said.

ET Intelligence Group: Valuations of Indian equities have eased after the recent sell-off but that may still not be enough to lure foreign funds back here as the country’s main share indices continue to trade at a premium to emerging market peers.

At the end of Tuesday’s trading session, the NSE Nifty 50 and the BSE Sensex had a trailing price-earnings (P/E) multiple of 21.2 times and 21.3 times, respectively. This compares with their P/Es of 22.8 at the beginning of the current calendar year. The Indian benchmark P/Es have softened from the levels of over 23 two years ago. This shows the market is cheaper than it used to be, tempering investor concerns of excessive valuations, which, along with slowing growth, has contributed to foreign investors’ risk-aversion towards India.

The valuation premium of Indian benchmarks has now narrowed with respect to nine out of 12 major global equity indices. For Instance, Nifty’s premium over the Hong Kong benchmark has reduced to 1.8 times from 2.3 times at the beginning of the year. The premium with respect to the German DAX and French CAC 40 has fallen to around 1.2 from 1.5 by similar comparison. In the case of other benchmarks, including the US Dow Jones and S&P 500, Indian benchmarks continue to trade at a marginal discount, as they did earlier.

The benchmarks have shed over 8% in 2026 so far, including a 4% drop since the beginning of March as investors turn cautious amid the rising concerns over the impact of the West Asian conflict between Iran and Israel. On a year-to-date basis, India has the second-worst performing equity market among major markets in the world behind Indonesia where the local benchmark has lost 14%.

Foreign institutional investors (FIIs) are creeping back into Indian stocks after a punishing $21 billion exodus but don’t break out the champagne just yet. The recovery hangs by a thread, with a make-or-break obstacle still blocking the path to a sustained comeback.

FIIs have turned net buyers of Indian equities in February, marking a tentative reversal after dumping $21 billion since late 2024—$19 billion in 2025 alone and another $2 billion so far in the calendar year. The turnaround follows a strengthening rupee and the announcement of an interim trade deal between India and the US, offering relief to investors who had fled amid currency depreciation fears.

Yet the rally remains perilously fragile. Earnings, the missing piece of India’s market recovery puzzle, continue to underwhelm, threatening to derail any sustained return of foreign capital.

“The trade deal certainly helped remove one of the overhangs for FIIs, as reflected in the recent uptick in foreign inflows and a firmer rupee,” said Amish Shah, Head of India Research at BofA Global Research. “However, it isn’t the only hurdle. Weaker rupee and muted Nifty earnings trajectory (likely in 1HCY26) remain headwinds for sustained FII inflows.”

Also read: Risk-on trade back? Smallcap stocks rally up to 28% in 2026, but market breadth stays weak

BofA expects Nifty to register just 7% earnings growth in FY26, with the weak momentum persisting into the fourth quarter. The firm anticipates earnings could accelerate to 13.5% in FY27, supported by improved loan growth, discretionary demand recovery aided by GST cuts, telecom tariff hikes, and stronger realisations for non-ferrous metals.

The trade deal’s timing proved crucial. India had incurred a trade deficit of $96 billion during April-December 2025, while facing the prospect of 50% tariffs on most merchandise exports to the US—its largest trading partner and source of an estimated $40 billion trade surplus.”FIIs started retreating from the Indian markets on the back of currency depreciation fears due to uncertainties associated with the India-US trade deal,” said Phanisekhar Ponangi, Co-Founder & Head of Investments at Mavenark Wealth. “The FIIs were naturally spooked due to growing tensions between India and the US, leading to record-high tariffs of 50% on most Indian merchandise exports.”

The threat was existential for foreign flows. With India’s trade surplus with the US at risk of shrinking significantly, strong downward pressure on the rupee loomed large.

“The prospects of the trade surplus with the US shrinking significantly were real, which would have led to strong downward pressure on the rupee,” Ponangi said. “The Q3 earnings, on the other hand, weren’t adequately strong to drive earnings and stock prices high enough to offset the losses incurred due to currency depreciation. In this backdrop, the announcement of the broad contours of the India-US trade framework has come at an opportune time for the markets.”

But Ponangi tempered expectations for a full-blown FII return. “While the FIIs may not allocate more to India merely on the back of the trade deal framework, we may see a material reduction in FII outflows in the near term owing to lesser nervousness on the currency front.”

Still, some market watchers see reasons for optimism beyond the immediate relief.

“Sustained FII selling, which has been a major drag on the market, has stopped,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “FIIs have been buyers in the market in last few trading sessions. This cannot be taken as a complete reversal of the FII stance but the sustained selling appears to be over.”

Vijayakumar pointed to the dollar’s roughly 10% depreciation over the past year as a potential catalyst for FII rotation. The currency move has significantly eroded dollar gains from US market investments, potentially nudging foreign investors to seek returns elsewhere.

“So FIIs might look for markets outside the US for gains this year and beyond,” he said. “The rupee stability and hope of appreciation in the months ahead also can nudge FIIs to turn buyers in India.”

Shah at BofA outlined several factors that could turn the equation favorable in the second half of 2026: potential Federal Reserve rate cuts that typically trigger emerging market inflows, improving earnings momentum, continued government reforms, potential fiscal stimulus if budgetary estimates see upsides, and clarity on Pay Commission hike quantum.

For now, the nascent rally has brought broader market participation, with mid and small caps rallying alongside large caps, bringing cheer to retail portfolios that had suffered through months of foreign selling pressure.

But until earnings pick up steam, foreign investors are likely to remain cautious buyers rather than committed believers in India’s equity story.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

Hello and welcome to ET Market Watch. I’m Neha Vashishth.

Indian equity markets closed lower on Wednesday, extending recent losses as global trade concerns and continued foreign investor outflows weighed on sentiment.

The Sensex slipped 245 points to close at 83,382, while the Nifty 50 fell below 25,700, ending at 25,665.
This marks the seventh decline in the last eight sessions, highlighting persistent nervousness in the markets.

Investor caution, driven by worries over potential US tariffs and uncertainty surrounding the India–US trade deal, kept foreign institutional investors risk-averse.

On the downside, IT and FMCG stocks dragged the indices.
Heavyweights such as TCS, Asian Paints, Maruti Suzuki, Sun Pharma and Hindustan Unilever fell between 1.5 and 2%.
TCS dropped over 2%, while HDFC Bank slipped 1.3%, limiting any recovery in the benchmarks.
Tata Elxsi also slid 5% after reporting a decline in quarterly profit.

There were, however, some clear pockets of strength.

PSU banks outperformed, with the PSU Bank index rising over 2% after strong earnings.
Union Bank of India surged nearly 8%, while Indian Overseas Bank gained over 2% on improved profitability.

Metals also found support, tracking higher global prices amid expectations of U.S. rate cuts and safe-haven demand.

Globally, cues were mixed.
Asian markets touched fresh highs, led by Japan, while US futures edged lower and European markets signaled a muted start.
Gold and silver surged to record highs, while crude oil prices remained largely flat.

Meanwhile, the rupee weakened slightly, ending at 90.29 against the dollar, pressured by foreign fund outflows and firm oil prices.

Looking ahead, investor focus now shifts to Q3 earnings, especially results from IT and banking companies.

That’s all for today on ET Market Watch.
I’m Neha Vashishth, thanks for listening.

Hello and welcome to ET Markets Watch, I’m Neha Vashishth.
Indian markets ended the week on a shaky note, with selling pressure deepening for the fifth straight session.

The Sensex slipped over 600 points, while the Nifty closed below 25,700, as global trade jitters and political uncertainty out of Washington kept investors firmly on the defensive.

Over the past five sessions, the Sensex has shed more than 2,350 points, wiping out nearly ₹8 lakh crore in investor wealth.

The biggest overhang remains Trump’s tariff threat. Markets are on edge ahead of the US Supreme Court verdict on the legality of Trump-era tariffs — a ruling that could reshape global trade flows. If tariffs are struck down, India, one of the worst-hit markets, could see relief-led buying.

Adding to the pressure is persistent FII selling, with foreign investors pulling out over ₹3,300 crore in the latest session.

Global cues remained mixed, crude prices climbed near two-week highs, and technically, benchmarks have broken key support levels, reinforcing bearish momentum.

That said, experts believe quality stocks in financials, consumption and industrials may offer long-term opportunities amid the correction.

That’s your quick market wrap.
Stay tuned to ET Markets Watch for all the big cues that matter.

Foreign Institutional Investors (FIIs) are poised to end 2025 with a record-breaking exodus from Indian equities, marking the steepest net outflows ever seen in the country’s capital markets. As of December 27, FIIs have sold equities worth Rs 22,130 crore through the exchanges, taking the cumulative equity selling in calendar year 2025 to Rs 2,31,990 crore.

Meanwhile, investments via the primary market stood at Rs 73,583 crore, bringing the net FII outflow figure to a staggering Rs 1,58,407 crore, the worst annual net selling by FIIs since they began investing in India.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the scale of the outflows, stating, “As the year 2025 draws to a close, FII selling in India is on track to set a new record in FII outflows… This is the worst selling by FIIs since they started investing in India.”

He noted that while FII activity was relatively balanced in the previous year, with primary market investments offsetting exchange-based selling, 2025 has seen a sharp divergence.

“In 2024 also, FIIs have also been selling through the exchanges. They sold equity for Rs 1,21,210 crores. However, for the year as a whole, the net FII inflow was positive since they had invested Rs 1,21,637 crores through the primary market. But for 2025, the net sales figure is a massive Rs 1,58,407 crores,” he explained.

Vijayakumar further attributed the intense selling pressure to the weakening of the Indian rupee. “The sustained selling by FIIs has contributed significantly to the sharp depreciation in INR this year,” he said, adding that prospects for a turnaround are beginning to emerge.

“Improvements in fundamentals are likely to attract net FII inflows in 2026. Robust GDP growth and prospects of improvement in corporate earnings in 2026 augur well for positive FII flows in 2026,” he said.The historic scale of outflows comes despite steady domestic participation and resilient economic indicators, highlighting the complex interplay of global capital flows, currency dynamics, and investor sentiment at the close of 2025.

Also read: Gold to end US dollar’s hegemony, become primary central bank reserve asset: Peter Schiff

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Hello and welcome to ET Market Watch. I’m Neha Vashishth, and here’s how markets wrapped up on Monday.
Indian equities extended their rebound for a second straight session. Benchmark indices closed firmly higher as a stronger rupee, renewed foreign inflows and supportive global cues lifted investor sentiment.

The Sensex jumped 638 points, or 0.75%, to settle at 85,567, while the Nifty 50 gained 206 points, ending the day at 26,172. Over the last two sessions, the Sensex has added nearly 1,100 points, signaling a clear revival in risk appetite after last week’s volatility.

So, what drove today’s rally?

First, the rupee bounce.
The Indian rupee strengthened sharply in early trade, rising 22 paise to 89.45 against the dollar, helped by renewed foreign inflows and firm intervention by the Reserve Bank of India. This comes after the currency had briefly slipped past the 91-per-dollar mark earlier this month. The rupee’s recovery has eased pressure on equities, especially import-heavy sectors.

Second, FIIs are back in buying mode.
Foreign institutional investors have now turned net buyers for three consecutive sessions. On Friday alone, FIIs bought shares worth over Rs 1,800 crore, while domestic institutions added a strong Rs 5,700 crore, reflecting broad-based institutional support.

According to Dr. VK Vijayakumar of Geojit Investments, the sharp reversal in the rupee and FIIs turning buyers are mutually reinforcing trends that could trigger short covering and push markets higher. However, he cautions that rich valuations may cap the upside, even as earnings growth prospects remain supportive.

Third, global cues remained favourable.
Indian markets tracked gains across Asia, following a technology-led rally on Wall Street. S&P 500 and Nasdaq futures edged higher, while Asian markets also advanced, Japan’s Nikkei jumped 1.5%, and South Korean stocks surged nearly 2%, driven by optimism around AI-linked earnings.

And finally, technical signals are turning constructive.
From a chart perspective, analysts say the Nifty appears to be stabilising after weeks of decline. Anand James of Geojit notes that the index is holding above recent lows, opening the door for a possible move toward 26,300. However, a slip below 25,980 could lead to consolidation, while a break under 25,650 may signal deeper downside.

Bottom line:
A stronger rupee, returning foreign flows and supportive global trends have given markets fresh momentum but valuations remain a key watchpoint.

That’s all for now.
You’re listening to ET Market Watch. I’m Neha Vashishth. Stay tuned.