Domestic Buying Cushions Indian Equities as Nifty Extends Losing Streak
Heavy domestic institutional inflows are preventing a sharper decline in Indian markets, offsetting recent foreign selling and keeping the Nifty 50 within a critical trading range.
The Indian stock market extended its losing streak to three consecutive weeks, maintaining a broadly range-bound structure amid cautious investor sentiment. Geopolitical uncertainty, fluctuating crude oil prices, and shifting US monetary policy expectations continue to weigh heavily on broader market momentum.
Despite this persistent weakness, domestic institutional investors provided a crucial buffer against foreign capital flight. On Friday, foreign institutional investors recorded net outflows of approximately 5,040 crore rupees. However, domestic institutions countered this selling pressure by purchasing roughly 5,184 crore rupees worth of equities, effectively stabilizing the benchmark index.
This daily dynamic reflects a broader, positive shift in monthly capital flows. Month-to-date, foreign investors have turned into marginal net buyers with inflows of around 454 crore rupees, interrupting several months of sustained foreign selling. Meanwhile, domestic participation remains overwhelmingly robust with month-to-date inflows reaching approximately 79,620 crore rupees, acting as the primary factor preventing a sharper market decline.
Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, assesses the overall market bias as cautiously positive. She notes that the benchmark Nifty 50 faces a critical resistance hurdle at the 24,400 zone, which must be decisively breached to anticipate a fresh upward move. Conversely, the 23,800 zone serves as crucial support that must be sustained to keep the broader trend intact.
Sector performance remains mixed across the board. While the technology sector offered late-week support following robust Nvidia earnings, underlying weakness in several large-cap stocks restricted a more comprehensive market recovery. This divergence highlights the selective nature of current market rallies.
For investors targeting lower-priced equities within this constrained environment, Parekh identified three stocks trading under 100 rupees with specific technical setups. Paramount Communications is recommended at 61.50 rupees with a 66-rupee target and 59-rupee stop loss, while Dwarikesh Sugar Industries is suggested at 50 rupees, targeting 65 rupees with a 48-rupee stop loss. Additionally, Bajaj Housing Finance is advised at 85 rupees, carrying a 90-rupee target and an 83-rupee stop loss.
