Indian shares likely to consolidate after foreign inflow-driven rally

Detailed summary

Foreign portfolio investors bought 125.63 billion rupees ($1.34 billion) worth of Indian shares on Wednesday, provisional data showed. They have net bought $6.43 billion of shares in November, already their biggest monthly purchase since September 2024.

Indian shares are expected to open little changed on Thursday, as benchmark indexes look to consolidate after a sharp rally driven by sustained foreign fund inflows, lower crude oil prices and a cooling global AI trade.

GIFT Nifty futures were at 25,270 as of 8:00 a.m. IST, indicating a muted start for the benchmark Nifty 50, which ended at a more-than-eight-month closing high of 25,255.05 on Wednesday.

Foreign portfolio investors bought 125.63 billion rupees ($1.34 billion) worth of Indian shares on Wednesday, provisional data showed. They have net bought $6.43 billion of shares in November, already their biggest monthly purchase since September 2024.

The robust inflows have pushed the Nifty 50 and Sensex indexes up 9.6% and 10%, respectively, so far in November.

The rally marks a reversal for Indian equities, which have lagged their emerging-market peers over the past two years due to elevated oil prices and limited exposure to the global AI-driven market rally.

Brent crude futures fell more than 1% to $91.8 per barrel on hopes for progress in peace talks over the Middle East and the Russia-Ukraine wars.

"Lower crude oil prices continue to provide a supportive backdrop, but the US 10-year Treasury yield hovering near 4.99%, coupled with the market's extended rally, may restrict immediate upside," said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1%, weighed down by shares in Hong Kong. [MKTS/GLOB]

Shares of Adani Green Energy, Coforge, Life Insurance Corporation of India, and Meesho will be in focus after index provider MSCI added them to MSCI India index. It removed PI Industries from the index.

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