Domestic buyers stepping in where foreigners are leaving
India's equity markets stand at a crossroads familiar to emerging economies navigating the tension between foreign skepticism and domestic conviction. Despite sustained foreign institutional outflows exceeding ₹2.16 lakh crore since January and a rupee touching record lows against the dollar, domestic investors have repeatedly stepped in to hold the line — and on Thursday morning, futures point higher still. The day's flood of corporate earnings, from steel to aerospace to pharmaceuticals, will test whether India's growth story can speak for itself amid a world of mixed signals.
- Foreign investors have now sold over ₹2,16,210 crore in Indian equities year-to-date, a relentless tide of outflows that has kept markets on edge throughout 2026.
- The rupee's fall to a record low of 95.75 per USD sharpens the pressure, signaling capital flight and raising the cost of confidence for overseas investors.
- Domestic institutional investors are playing the role of ballast, buying ₹5,869 crore on Wednesday alone to offset foreign selling and prevent a steeper market slide.
- NIFTY futures advanced 90 points ahead of Thursday's open, suggesting that at least some investors believe the worst of the selling wave may be receding.
- Around 140 companies report Q4 earnings today — including JSW Steel, Tata Motors, and HAL — with early results like ONGC's 62% profit jump offering reasons for cautious optimism.
- Mixed global cues, from a stumbling S&P 500 to uneven Asian markets and crude oil above $105, mean the domestic earnings story must carry more weight than usual.
India's stock market was set to open higher on Thursday, even as the broader investment climate remained unsettled. NIFTY futures trading in GIFT City advanced 90 points to 23,552, a sign that domestic appetite had not been extinguished despite persistent foreign selling. The previous session had snapped a four-day losing streak, though the recovery was fragile — the NIFTY swung nearly 320 points intraday before closing just 33 points higher at 23,413.
The tug-of-war between foreign and domestic investors has become the defining rhythm of India's markets this year. Foreign institutional investors sold ₹4,703 crore on Wednesday, extending a year-to-date exodus of ₹2,16,210 crore. Domestic institutions absorbed the blow, buying ₹5,869 crore on the same day — a pattern of local resilience that has repeatedly prevented sharper declines. Meanwhile, the rupee slid to a record low of 95.75 against the US dollar, adding a currency dimension to the pressure on foreign investor sentiment.
Global signals offered little clarity. The Nasdaq surged to a record on the back of technology stocks, but the S&P 500 and Dow both fell as disappointing inflation data dampened broader enthusiasm. Asian markets traded unevenly, and crude oil held above $105 per barrel — a cost burden that hangs over India's import-heavy economy.
Thursday's session will be shaped most decisively by corporate earnings. Some 140 companies are due to report March quarter results, and early disclosures have been mixed but broadly encouraging. ONGC posted a 62% jump in quarterly profit, buoyed by higher crude output and better price realization. An auto major reported 22% revenue growth and a 36% surge in operating profit. A pharma company announced a $166.4 million acquisition of a US oncology firm, signaling expansion ambitions. Against these, a consumer electronics company took a ₹716 crore impairment charge — a reminder that not all corners of the economy are thriving equally.
The session ahead will test whether domestic conviction can continue to outweigh foreign caution, and whether a strong enough earnings season can reframe the narrative from one of outflows and currency weakness to one of underlying growth.
The Indian stock market is preparing for a higher opening on Thursday morning, even as foreign investors continue to pull money out of the country's equities. Futures trading in Ahmedabad's GIFT City showed NIFTY advancing 90 points to 23,552, a signal that domestic appetite remains intact despite the broader headwinds. The picture, however, is complicated: while the market snapped a four-day losing streak on Wednesday, the gains came with visible strain.
On Wednesday, foreign institutional investors sold shares worth ₹4,703.15 crore, continuing a pattern of outflows that has defined the year so far. Since January, these overseas investors have offloaded ₹2,16,210 crore worth of Indian stocks, according to depository data. Yet domestic institutional investors stepped in to buy ₹5,869.05 crore on the same day, a cushion that has kept the market from collapsing under the weight of foreign selling. The NIFTY50 index closed 33 points higher at 23,413, while the SENSEX gained 50 points to finish at 74,609. The day's trading was volatile—the NIFTY swung between a high of 23,583 and a low of 23,262—before investor caution took hold late in the session.
The rupee's weakness is adding another layer of concern. The Indian currency hit a fresh record low of 95.75 against the US dollar on Wednesday, a development that typically signals capital outflows and can dampen sentiment among foreign investors. Wall Street's overnight performance offered mixed signals: the Nasdaq surged 1.2% to a record 26,402.34, driven by technology stocks, but the broader market stumbled. The S&P 500 fell 0.58% and the Dow Jones Industrial Average declined 0.14%, as disappointing inflation data weighed on sentiment. Across Asia, markets were trading unevenly. Japan's Nikkei edged up 0.15%, Hong Kong's Hang Seng gained 0.74%, but China's Shanghai Composite slipped 0.8%. Crude oil remained elevated above $105 per barrel.
Thursday's session will be shaped significantly by corporate earnings. Around 140 companies are scheduled to report their March quarter results today, a flood of data that could either reinforce confidence in India's economic momentum or expose cracks beneath the surface. The list includes major names: JSW Steel, Hindustan Aeronautics, Muthoot Finance, Tata Motors Passenger Vehicles, United Spirits, Voltas, and Siemens Energy India, among others. Early results from some of these firms have shown resilience. Oil and Natural Gas Corporation reported a 62% jump in consolidated fourth-quarter profit, reaching ₹2,424 crore compared to ₹1,497 crore a year earlier, buoyed by higher crude production and improved price realization at $77.89 per barrel versus $74.46 previously. The company's full-year consolidated profit rose to ₹7,551 crore from ₹7,040 crore.
Other heavyweights have also delivered. An auto major's revenue from operations jumped 22% year-on-year to ₹24,452 crore in the quarter, with operating profit surging 36% to ₹3,307 crore. A pharmaceutical company announced a $166.4 million acquisition of a US-based specialty oncology firm, signaling confidence in expansion despite the challenging investment climate. NLC India, the state-run power and mining company, saw total income rise to ₹5,197.22 crore from ₹3,971.90 crore, and approved a final dividend of 2.50% for the fiscal year. A healthcare diagnostics firm reported consolidated revenue of ₹424.68 crore in the quarter, up from ₹345.29 crore a year ago, and approved a second dividend of ₹1 per share.
Yet not all results have been uniformly positive. One consumer electronics company took a ₹716.04 crore impairment charge related to its investment in a subsidiary and associated intangible assets, a writedown that underscores the challenges facing some segments of the market. These mixed signals—strong operational performance in some sectors, weakness in others—reflect an economy in transition, where global headwinds and domestic strength are pulling in different directions.
The day ahead will test whether India's domestic institutional investors can continue to absorb foreign selling, and whether the earnings season can sustain the narrative of growth that has kept the market afloat. The rupee's weakness remains a concern, as does the persistence of foreign outflows. But the fact that domestic buyers are stepping in, and that futures are pointing higher, suggests that at least some investors believe the worst of the selling pressure may have passed.
Notable Quotes
NIFTY50 index ended 33 points higher at 23,413 and SENSEX advanced 50 points to close at 74,609— Market closing data, May 13
Oil and Natural Gas Corporation's full-year consolidated profit rose to ₹7,551 crore from ₹7,040 crore— ONGC regulatory filing
The Hearth Conversation Another angle on the story
Why are foreign investors still selling if earnings are coming in strong?
Because they're looking at the rupee hitting record lows and seeing a signal that India's fundamentals may be weakening relative to other markets. Strong earnings matter, but currency depreciation can erase those gains when you convert rupees back to dollars.
So domestic investors are betting against the foreigners?
Not exactly betting against them—more like stepping into the gap they're leaving. Domestic funds have different time horizons and currency exposure, so a weak rupee doesn't hurt them the same way. They're buying what they see as undervalued.
Is 140 earnings reports in one day unusual?
It's the end of the fiscal year, so companies are rushing to report their March quarter results. It's concentrated, yes, but it's also when you get the clearest picture of how the year actually went. The market is hungry for that data.
What happens if earnings disappoint?
Then the foreign selling probably accelerates, and domestic buyers may not have the appetite to absorb it. The rupee could weaken further. But if earnings are solid, it gives domestic investors confidence to keep buying, and that can stabilize the market.
The Nasdaq hit a record high but the broader US market fell. What does that tell you?
It tells you that growth is concentrated in a few mega-cap tech stocks, while the rest of the market is struggling with inflation concerns. That's a fragile setup globally, which makes emerging markets like India even more vulnerable to capital flight.