Market struggles amid heavy selling by Foreign Institutional Investors

The Indian stock market is facing significant pressure from heavy selling by foreign institutional investors (FIIs) and is struggling with a bearish grip. This week, the market saw a notable decline, despite attempts to recover through buying by domestic institutional investors. However, as selling pressures intensified, the market fell again. Currently, the market shows oversold positions, but there are no clear signs of recovery. Experts believe that while some signs of recovery are visible, they will likely face resistance due to increased selling, and further declines may follow. In such a scenario, some experts suggest that it might be the right time to invest in selective stocks, though investors must be prepared for a potentially long waiting period. Investors are advised to invest only a part of their portfolio and wait for market improvements. Since the direction of the market remains uncertain, savvy investors should tread carefully and focus on high-quality stocks that can offer profits once the market turns around.

On a positive note, global brokerage firm CLSA has recently declared Indian stock markets safe for investment, despite foreign institutional investors withdrawing funds to invest in China during September. CLSA predicts that these investors will likely return to India due to potential shifts in U.S.- China relations, especially with Trump’s return to power in the U.S. Regarding India’s economy, experts remain confident that it will remain strong in the coming years, with expected growth in line with projections. The recent dip in crude oil prices is also expected to provide some relief to Indian industries.

Last week, the Indian stock market failed to recover from its previous week’s weakness. The BSE index dropped by 1,906.01 points (2.40%) to close at 77,580.31, while the NSE Nifty fell by 615.50 points (2.55%), closing at 23,532.70. The decline was more pronounced in the midcap and small-cap indices. Currently, expectations are higher for recovery in select midcap and smallcap stocks.

Weaker demand led to declines in gold and silver prices in the bullion market. On Saturday, the price of 24-carat gold in Jaipur’s bullion market stood at Rs 76,400 per 10 grams and silver at Rs 91,000 per kg. Stability in gold and silver prices is expected to continue.

This week, market experts predict continued volatility, with investors advised to be patient. Risk-taking investors may consider selective stocks such as Indian Hotels, Zomato, and HFCL. Additionally, two companies on the main board and three on the MSME platform will offer IPOs, providing investors opportunities. However, investors should remain cautious of high premiums in new IPOs. Two companies have also filed their Draft Red Herring Prospectuses (DRHP) with SEBI this week.

(This is the personal opinion of the author)