Indian equity markets are anticipated to open cautiously this Friday, with the Gift Nifty indicating a bearish start, projected to drop by approximately 150 points.
Ponmudi R, CEO of Enrich Money, noted that the Indian markets are likely to remain sensitive to news developments, particularly due to escalating geopolitical tensions in the Middle East. These tensions have considerably impacted investor sentiment, despite occasional relief rallies. The recent military exchange between the U.S. and Iran near the Strait of Hormuz has heightened uncertainty in the markets. However, President Donald Trump has urged Tehran to consider U.S. proposals, asserting that Washington does not desire an escalation of conflict. The juxtaposition of military actions and diplomatic communications is keeping investors apprehensive, tapering risk appetite and fostering a defensive sentiment in global financial markets.
In this context, Emkay Global Research maintains a positive outlook on Indian equities, predicting a rebound in macroeconomic conditions and earnings growth following the conclusion of the Iran war. The firm has indicated that optimism is returning as reports circulate about a potential peace agreement. Even if this is a premature announcement, Emkay believes that the conflict will end soon, projecting that the Strait of Hormuz may reopen in weeks. They have set a target of 29,000 for the Nifty by March 2027, anticipating a 14% growth in earnings for FY27. Changes to their model portfolio have been made, but the focus remains on sectors such as Discretionary and Industrials.
On the other hand, foreign portfolio investors (FPIs) continue to offload their stakes in Indian markets at a significant pace. JM Financial reported that FPIs were net sellers amounting to ₹68,870 crore (approximately $7.3 billion) in April 2026, despite the Nifty posting a monthly rise of 7.5% following an 11.3% decline in March 2026. The data highlights a continued outflow of funds, with April marking a record for net sales, following the largest monthly net FII outflow ever documented. While the primary market recorded net FII inflows of ₹2,300 crore in April compared to ₹3,000 crore in March, the secondary market experienced net outflows of ₹71,200 crore, a decrease from ₹1,29,200 crore the previous month.
The FII ownership in total Indian equities has dropped from 19.9% in April 2016 to 14.7% in April 2026, the lowest level observed since June 2012. Conversely, domestic institutional investors’ (DIIs) share of total Indian equities has increased, reaching 18.9% in March 2026.
Published on May 8, 2026.
