Indian Equities Recover: Domestic Inflows Counter Foreign Sales
India's Nifty 50 and Sensex ended an eight-week decline on October 9, supported by local investors buying ₹40,355 crore amidst high global oil prices.
Indian Equities End Losing Streak on October 9
Indian benchmark indices staged a notable recovery on Friday, October 9, concluding an eight-week period of decline. The Nifty 50 index rose by 1.30%, while the Sensex advanced 1.23%. The Bank Nifty index also saw gains, increasing by 1.36%.
This rally was primarily driven by the information technology sector, following the release of Tata Consultancy Services' September-quarter results. Buying activity subsequently extended to fast-moving consumer goods (FMCG), automotive, and financial shares, broadening the market's positive momentum.
Domestic Buying Absorbs Foreign Outflows
Foreign institutional investors (FIIs) recorded net outflows of approximately ₹39,779 crore in October so far. However, domestic institutional investors (DIIs) largely offset this selling pressure, purchasing around ₹40,355 crore over the same period. This domestic demand has provided crucial support, stabilising the market against overseas capital flight.
The broader macroeconomic environment remains challenging, with Brent crude trading above $100 a barrel and West Texas Intermediate (WTI) crude above $90. These persistently high oil prices pose risks to India's inflation, import bill, and the value of the rupee.
Choice Broking Sets Nifty Support at 22,250
Sumeet Bagadia, Executive Director at Choice Broking, indicates immediate support for the Nifty 50 index lies between 22,250 and 22,400, with key resistance identified at 22,650–22,700. For the Bank Nifty index, support is seen at 54,800–55,000, while 55,500–55,800 forms the next resistance zone.
Bagadia suggests that Nifty 50 chart patterns show improving short-term sentiment, although the index's broader structure remains weak below key moving averages. The India VIX, a measure of market volatility, eased to 14.375, reflecting reduced uncertainty.
Asia Watches India's Domestic Investor Role
The resilience demonstrated by India's domestic institutional investors in countering significant foreign selling offers a valuable precedent for other Asian markets. This dynamic could prove critical for economies such as Indonesia or Vietnam, which also depend on local capital to absorb external shocks.
These economies may face similar pressures if global energy prices remain elevated and foreign capital flows become volatile into the final quarter of 2026. Asian investors should monitor the sustained strength of domestic buying in India as an indicator of broader market stability under external strain.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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