Even as tensions flare up in West Asia, there is some encouraging news for Indian equities. The well-known US brokerage Goldman Sachs believes foreign institutional investors (FIIs) are set to gradually make their way back to India. In an assessment released on Monday, the firm said the NSE's benchmark index, the Nifty, could jump about 10 percent over the next year to reach the 26,500 mark.
Selling pressure appears to be easing
According to Goldman Sachs, the phase of aggressive selling by foreign investors is probably over. The firm argues that two factors, a stronger outlook for the domestic economy and the reduced holding of foreign investors in Indian shares, could slowly lift market sentiment. When existing ownership is low, investors have plenty of room to step up their buying once again.
A record $30 billion left in three months
The assessment noted that in the first half of 2026, the Indian market was used by foreign investors as a place to raise cash. That is why, in just a little over three months, a record $30 billion of capital flowed out of the country. The figure clearly reflects the dip in foreign investor confidence during that stretch.
The mood shifted from mid-June
The picture, however, now seems to be turning. Since the middle of June, foreign investors have become net buyers and have poured in close to $2 billion into the Indian market. This buying has been seen mainly in the financial sector, that is, banking and finance companies. Since foreign funds still hold a small share of Indian stocks, they have considerable room to raise their investment going forward.
Markets had opened sharply lower on Monday
Amid the fresh, fast-rising tensions in West Asia, domestic markets opened with a heavy fall on Monday. At the start of trade the Sensex slid 606 points and the Nifty dropped 168 points. But a strong surge in IT stocks then steadied the market and drove a remarkable recovery, so by the close the market ended slightly higher in the green.
Both indices closed in the green after recovering
On Monday the BSE Sensex ended with a modest gain of 47.01 points, or 0.06 percent, at 77,616.40. The NSE's Nifty 50 index, meanwhile, closed up 4.10 points, or 0.02 percent, at 24,211.00. In this way, a market that had opened with a steep fall managed to compose itself after a day of swings and finish in positive territory.
