Trump Warns Iran of 'Greater Force' as Israel Shuts Airspace; Indian Stocks Brace for Monday Slump

  The escalating Israel-Iran conflict, now intensified by U.S. strikes on Iranian nuclear sites, has sent shockwaves through global markets. U.S. President Donald Trump, speaking from the White House, warned Iran of “greater force” if it retaliates, labeling the nation a “Middle East bully” and urging peace. With Israeli airspace closed and U.S. B-2 stealth bombers deployed to Guam, the situation is precarious. This article analyzes the potential negative impact on the Indian stock market come Monday, as geopolitical tensions threaten economic stability. Escalation of the Israel-Iran Conflict The conflict entered its second week with the U.S. confirming strikes on Iran’s Fordow, Natanz, and Isfahan nuclear facilities. These targeted attacks follow heightened hostilities between Israel and Iran, with Trump’s remarks signaling a hardline U.S. stance. The closure of Israeli airspace underscores the severity of the situation, disrupting regional trade and aviation routes. Iran’s potent...
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NIFTY, SENSEX Rally in FY25 Finale: FII’s ₹6,367 Crore Bet—Bottom Found or Fall Ahead?



The Indian stock market ended FY25 on a high note, with the NIFTY 50 and SENSEX surging in the final week amid a notable comeback by Foreign Institutional Investors (FIIs). After months of relentless selling, FIIs turned net buyers in March, purchasing ₹6,367 crore worth of shares in the cash segment—their first monthly inflow since September 2024. This shift has sparked a critical question for investors: Is this the market bottom, or should we brace for a further fall? In this blog, we’ll analyze the recent rally, the FII pivot, and what might lie ahead for the NIFTY and SENSEX in FY26.

NIFTY and SENSEX Rally: A Late FY25 Surge

In FY25’s final week, the SENSEX rose by 509 points (0.68%) to close at 77,414.92, while the NIFTY 50 gained 168 points (0.73%), ending at 23,519.35. Despite a subdued final trading day on March 28, both indices notched a 6% gain for March—their first monthly increase in six months. For the full financial year, the NIFTY climbed 5.34%, and the SENSEX advanced 5.4%, a respectable performance given the volatility of 2024-25.

However, the broader market showed mixed results. Midcap and Smallcap indices slipped by 0.5% and 1% in the last week, hinting at uneven momentum. With FIIs back in the game, the big question remains: Does this rally signal a market bottom, or is it a temporary bounce before a deeper correction?

FIIs Flip the Script: From Sellers to Buyers

The standout driver of this surge was the return of Foreign Institutional Investors. After exiting equities worth ₹3.24 crore in Indian markets since October 2024, FIIs reversed course in March, injecting ₹6,367 crore into the cash segment on a net basis. This marked a significant shift from their selling spree, which had pressured the NIFTY and SENSEX to retreat from their September peaks of 26,277.35 and 85,978.25, respectively.

What triggered this FII comeback?

  1. Value Buying: Post-correction valuations became attractive, with the NIFTY trading at a more reasonable 20x forward earnings compared to 24x in September.
  2. Economic Stability: India’s Q3 FY25 GDP growth of 6.2% and inflation cooling to 3.6% bolstered confidence.
  3. Global Factors: Positive cues from U.S. markets (Dow crossing 45,000) and a stable rupee at 85.85 against the dollar added tailwinds.

Meanwhile, Domestic Institutional Investors (DIIs) remained a pillar of support, pouring ₹603,850.49 crore into equities in FY25, offsetting earlier FII outflows. This dual buying force has fueled hopes of a sustained recovery—but is it enough to call the bottom?

Winners and Losers in the Final Week

The rally was led by heavyweights like HDFC Bank, Bajaj Finance, and Larsen & Toubro, while Tata Motors slumped 5% amid U.S. tariff threats under President Trump. Sectorally, Nifty Financial Services soared 19% in FY25, followed by Metals and Pharma, while PSU Banks, Energy, and Media lagged with losses of 11-18%. The Nifty Midcap 100 and Nifty Smallcap 100 gained 7% and 5.4% for the year but softened in the final week.

Is This the Bottom? Key Indicators to Consider

The FII inflows and late FY25 rally have sparked debate: Are we at the market’s turning point, or is more downside ahead? Let’s break it down:

Bullish Signals

  • FII Reversal: The ₹6,367 crore inflow in March suggests foreign investors see value after months of selling.
  • Technical Support: The NIFTY held above its key support of 23,400, with resistance at 23,800. A breakout could push it toward 24,200.
  • Domestic Strength: DII buying and India’s solid macroeconomic fundamentals provide a cushion.

Bearish Risks

  • Global Headwinds: Trump’s proposed 25% tariffs on EU, Canadian, and auto imports (effective April 2, 2025) could dent export-heavy sectors like IT and autos.
  • Valuation Concerns: Despite the correction, the NIFTY’s 20x forward P/E remains above its historical average of 18x, suggesting limited upside unless earnings accelerate.
  • Volatility Ahead: Weak global cues on March 28 and profit-taking could trigger a pullback.

Analysts suggest the NIFTY’s immediate fate hinges on holding 23,400. A drop below this level might see it test 23,200, while a move above 24,200 could confirm a bottom.

What’s Next for FY26?

Looking ahead, FY26’s outlook depends on several catalysts:

  1. Trade Policy Clarity: The Indo-US trade talks and Trump’s tariff decisions will be pivotal. A favorable outcome could draw more FII flows.
  2. Earnings Growth: A projected earnings rebound in Q1 FY26 could lift the NIFTY past 24,000 and the SENSEX beyond 80,000.
  3. RBI Moves: A potential rate cut to 6.25% might spur further market gains.

However, risks like geopolitical tensions, rising U.S. bond yields, and profit-taking could cap the upside. Investors should watch upcoming PMI data and U.S. job reports for directional cues.

Takeaways for Investors

So, is this the bottom, or should you prepare for a further fall? The FII comeback and FY25’s strong finish signal potential stability, but global uncertainties keep the jury out. Here’s how to navigate:

  • Focus on Resilience: Bet on sectors like financials and pharma, which have outperformed, while avoiding tariff-sensitive stocks like autos.
  • Stay Flexible: Keep cash handy for dips below 23,400 or to ride a breakout above 24,200.
  • Think Long-Term: India’s growth story remains intact, making corrections a buying opportunity for patient investors.

Final Thoughts

The NIFTY and SENSEX surge in FY25’s final week, backed by ₹6,367 crore in FII inflows, offers a glimmer of hope after a volatile year. While it’s tempting to call this the market bottom, global risks and lofty valuations suggest caution. Whether this rally holds or fades, staying informed and adaptable will be key to thriving in FY26.

Location:Nainital Uttarakhand ,India India

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