Markets soar as FII inflows drive broad-based rally; Sensex breaches 77K intraday 

Equity markets posted robust gains on Friday, extending their winning streak to the fifth consecutive session as foreign institutional investors (FIIs) returned to the domestic markets. The benchmark BSE Sensex closed 557.45 points or 0.73 per cent higher at 76,905.51, while the NSE Nifty 50 ended at 23,350.40, up 159.75 points or 0.69 per cent, recovering significantly from the bearish sentiment witnessed in previous months.

The domestic market concluded the week with a consistent recovery, despite mixed global cues, as investors shrugged off negative global market sentiment. “The anticipated reduction in risk-free rates, coupled with the correction in the dollar index, are facilitating fund flows back to EMs. FIIs, whose selling activity has been waning, are becoming net buyers, driven by dovish signals from the US Fed, which suggest the possibility of two rate cuts this year,” said Vinod Nair, Head of Research, Geojit Financial Services.

Foreign portfolio investors (FPIs) were net buyers in the capital market segment, purchasing equities worth ₹3,239.14 crore on March 20, 2025. In contrast, domestic institutional investors (DIIs) were net sellers, offloading equities worth ₹3,136.02 crore during the same period. Among other categories, proprietary traders recorded a net inflow of ₹152.77 crore, while clients saw a net outflow of ₹283.78 crore. Meanwhile, non-resident Indians (NRIs) were also net sellers, with an outflow of ₹10.40 crore.

The broader markets outperformed the benchmarks, with the Nifty Midcap Select rising 1.25 per cent to 11,507.00 and the Nifty Next 50 gaining 0.88 per cent to close at 62,855.85. Banking and financial stocks performed well, with Nifty Bank rising 1.06 per cent to 50,593.55, and Nifty Financial Services closing 1.07 per cent higher at 24,567.95.

Among individual stocks, SBI Life emerged the top gainer on the NSE, surging 3.43 per cent to ₹1,549.75. Other major gainers included NTPC (3.29 per cent), ONGC (2.72 per cent), Bajaj Finance (2.67 per cent), and BPCL (2.56 per cent). On the flip side, Trent led the losers, falling 1.60 per cent to ₹5,138, followed by M&M (-1.45 per cent), Wipro (-1.38 per cent), Hindalco (-1.27 per cent), and Infosys (-1.25 per cent).

The market breadth remained positive, with 2,823 stocks advancing and 1,213 declining on the BSE, out of a total of 4,162 stocks traded. Additionally, 75 stocks hit their 52-week high, while 96 touched their 52-week low. Ten stocks hit the upper circuit limit, while four hit the lower circuit.

Market capitalisation witnessed significant growth throughout the week. BSE’s total market capitalisation rose from ₹39,317,232.22 crore on March 17 to ₹40,924,873.00 crore on March 20, indicating robust wealth creation for investors. The top 10 companies’ market capitalisation also climbed from ₹8,940,223.59 crore to ₹9,175,059.43 crore during the same period.

“Investors continued with short covering, which helped Sensex breach the 77k mark in intra-day trades. Also, investors could be squaring off their positions ahead of next week’s monthly F&O expiry, resulting in a sharp rally,” noted Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

The Indian rupee strengthened significantly against the US dollar, appreciating by 0.46 per cent to close at 85.94. “Rupee strengthened further with a sharp rise of 0.40 Rs or 0.46 per cent at 85.94, as FII inflows surged, with strong buying figures in recent days. The Fed’s decision to hold rates steady and its forecast for lower interest rates ahead pulled the dollar down, providing significant support to the rupee,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

Dilip Parmar, Senior Research Analyst at HDFC Securities, added: “The Indian rupee has strengthened past the 86 mark against the US dollar for the first time since January, driven by a surge in foreign investments in the domestic capital and debt markets. These factors together have helped bolster the local currency. The central bank’s efforts have paid off, with the rupee emerging as the top performer among Asian currencies so far this month.”

In the commodities space, gold continued to witness profit-booking. “Gold continued to witness profit-booking as rupee strength pressured MCX prices below ₹88,100, testing the crucial ₹88,000 zone. In Comex, gold also showed signs of weakness, slipping by $5, with persistent rejection near the $3,050 mark over the past few days,” explained Jateen Trivedi.

Oil prices held gains, trading above $68.3 a barrel due to lingering geopolitical tensions. Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, noted: “WTI Crude closed 1.6 per cent higher yesterday at $68.26/bbl, buoyed by supply concerns as the US tightened sanctions on Iranian crude, targeting entities, including a Chinese independent refinery.”

From a technical perspective, analysts remain optimistic about market momentum. “Nifty continued its strength after breaking the trend line resistance and formed a bullish candle on both the daily and weekly charts, indicating strong momentum. Immediate support for the index is placed near the 23,000 level, while short-term resistance is positioned near 23,520,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd.

Rupak De, Senior Technical Analyst at LKP Securities, commented: “A decisive move above 23,400 could drive the index higher by another 200 points, as the next resistance is at 23,600. A clear breakout above 23,600 might trigger another leg of the rally.”

As the week concludes, market participants appear increasingly optimistic about the potential for continued gains, supported by improving domestic macroeconomic indicators, valuation corrections, and anticipated earnings growth, which are encouraging investors to seek bargains in the Indian equity markets.