Indian Equities Extend Gains as Large-Caps Drive Market Momentum
Indian equities extended their winning streak from the previous fortnight, buoyed by continued investor optimism and robust participation from large-cap stocks.
The BSE Sensex and Nifty 50 surged nearly 2 per cent each, reflecting sustained confidence among both domestic and foreign investors.
However, the rally was largely concentrated at the top, with mid- and small-cap indices showing limited participation.
The BSE Mid-Cap Index gained a modest 0.50 per cent, while the BSE Small-Cap Index added just 0.26 per cent, indicating a phase of consolidation following their sharp run-up earlier in the year.
Rotation Toward Quality and Liquidity
The muted performance of mid- and small-cap segments reflected investor selectivity amid stretched valuations and a shift toward high-quality, liquid large-cap names.
Across sectors, all major indices ended in the green, but gains were moderate.
Real Estate, FMCG, and Banking emerged as standout performers.
A weaker dollar, expectations of global rate easing, and improved risk appetite served as the key macro tailwinds supporting sentiment.
RBI’s Dollar Sales and Sectoral Tailwinds
The Reserve Bank of India’s (RBI) large-scale dollar sales strengthened the rupee, which investors perceived as a stability signal, aiding interest-sensitive sectors such as real estate.
The real-estate sector continues to benefit from favourable demand dynamics, rising transaction values, and structural policy tailwinds.
Meanwhile, with several sectors grappling with global headwinds, investors turned to defensive FMCG stocks such as Hindustan Unilever and Nestlé India, viewing them as safe bets amid volatility.
The GST realignment and tax rationalisation on essentials further improved sentiment across consumer-staples names.
Banking Sector in Spotlight
The banking space remained in focus despite concerns about subdued loan demand and potential margin compression following central-bank rate cuts.
Adding optimism, Goldman Sachs’ bullish outlook on Indian banks highlighted improving financial conditions, attractive valuations, and the prospect of a credit-growth revival — catalysts for a sectoral re-rating.
Reflecting this renewed confidence, the BSE Bankex touched fresh record highs during the fortnight.
Volatility and Institutional Flows
The Nifty VIX, often called the market’s fear gauge, spiked nearly 15 per cent, signalling short-term volatility and trader caution.
Yet, a major positive shift emerged — Foreign Institutional Investors (FIIs) halted their prolonged selling streak and turned net buyers across most sessions, signalling reviving global confidence in Indian equities.
At the same time, Domestic Institutional Investors (DIIs) infused over ₹22,000 crore into the market, providing a steady cushion against global fluctuations and reinforcing India’s structural resilience.
Looking Ahead
Analysts expect the large-cap leadership to continue in the near term, supported by stable macro indicators, liquidity inflows, and optimism around corporate earnings.
However, market participants caution that elevated valuations and rising volatility could prompt intermittent profit-taking across broader segments.
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To understand how to align your portfolio with emerging sectoral opportunities and macro shifts, connect with Rurash Financials — specialists in wealth management, equity advisory, and investment diversification.