If you’re still on the sidelines hoarding cash under your pillow, it’s getting lonely out there. In just six trading sessions, the Sensex has vaulted nearly 6,000 points, with bulls charging toward the 80,000 mark. The Nifty has surged to a three-month high. On Dalal Street, what began as FOBI—Fear of Being Invested—has rapidly mutated into full-blown market FOMO, as investors scramble to reboard a rally they nearly wrote off.
What’s fueling the surge?
A $2 billion foreign fund gush—Rs 16,600 crore of FII buying in just four sessions—as India cements its position as a relative safe haven amid global uncertainty.
Bank Nifty and Nifty Financial Services have hit fresh 52-week highs. Volatility is retreating—India VIX has cooled by nearly 30% in a week—and domestic macro tailwinds are adding fuel to the fire.
“During normal times, the correlation between the US market—known as the mother market—and others is high. But these are abnormal times when that correlation may not hold. The US market was rattled yesterday on news of potential Trump-Powell tensions impacting Fed independence. Markets abhor this,” said Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit.
He added that this period of uncertainty is likely to see emerging markets like India decouple from the US.
Also read | Bajaj Finance crowned new Nifty king of 2025 with highest 36% return. What’s next?
Nomura, too, is turning cautiously optimistic. While it highlights downside risks to consensus growth and earnings estimates, it believes falling commodity and oil prices, a possible US trade deal, and India’s stable macros position the country to benefit from global supply-chain shifts.
In a tactical shift, Nomura has reset its March 2026 Nifty target to 24,970, based on a 19.5x multiple of FY27 estimated EPS of ₹1,280—even after trimming earnings estimates by 5%.
“We raise the target valuation multiple from 18.5x earlier to factor in the drop in yields, assuming no material increase in risk premium,” the brokerage said, adding that FII flows could turn supportive again after a six-month selloff.
Nomura sees a wide 12-month return band of -9% to +7%, depending on how the risk environment unfolds.
Meanwhile, the breadth of the rally is hard to ignore.
“Sustained FII inflows underscore a positive outlook on India’s economic growth potential,” said Vinit Bolinjkar, Head of Research at Ventura. “Improved liquidity in the banking system, facilitated by RBI measures, is also fuelling momentum.”
Some mutual fund managers who had been sitting on cash are now deploying capital to raise equity exposure.
“We’re doubling down on every dip in stocks showing strength. We either exit or hold positions where uncertainty remains,” said Viraj Gandhi, CEO, SAMCO Mutual Fund.
Still, not everyone is throwing caution to the wind.
“Markets seem to have discounted most negatives for now. But investors should tread carefully—fresh entries should be made in tranches rather than all at once,” said Aamar Deo Singh, Sr. VP – Research at Angel One.
“The silver lining is that much of the bad news is priced in. Unless a Black Swan event emerges, staying long while keeping an eye on valuations is the prudent path forward.”
With every session, the market seems to be sending a clear message: this rally might not wait.
What’s fueling the surge?
A $2 billion foreign fund gush—Rs 16,600 crore of FII buying in just four sessions—as India cements its position as a relative safe haven amid global uncertainty.
Bank Nifty and Nifty Financial Services have hit fresh 52-week highs. Volatility is retreating—India VIX has cooled by nearly 30% in a week—and domestic macro tailwinds are adding fuel to the fire.
“During normal times, the correlation between the US market—known as the mother market—and others is high. But these are abnormal times when that correlation may not hold. The US market was rattled yesterday on news of potential Trump-Powell tensions impacting Fed independence. Markets abhor this,” said Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit.
He added that this period of uncertainty is likely to see emerging markets like India decouple from the US.
Also read | Bajaj Finance crowned new Nifty king of 2025 with highest 36% return. What’s next?
Nomura, too, is turning cautiously optimistic. While it highlights downside risks to consensus growth and earnings estimates, it believes falling commodity and oil prices, a possible US trade deal, and India’s stable macros position the country to benefit from global supply-chain shifts.
In a tactical shift, Nomura has reset its March 2026 Nifty target to 24,970, based on a 19.5x multiple of FY27 estimated EPS of ₹1,280—even after trimming earnings estimates by 5%.
“We raise the target valuation multiple from 18.5x earlier to factor in the drop in yields, assuming no material increase in risk premium,” the brokerage said, adding that FII flows could turn supportive again after a six-month selloff.
Nomura sees a wide 12-month return band of -9% to +7%, depending on how the risk environment unfolds.
Meanwhile, the breadth of the rally is hard to ignore.
“Sustained FII inflows underscore a positive outlook on India’s economic growth potential,” said Vinit Bolinjkar, Head of Research at Ventura. “Improved liquidity in the banking system, facilitated by RBI measures, is also fuelling momentum.”
Some mutual fund managers who had been sitting on cash are now deploying capital to raise equity exposure.
“We’re doubling down on every dip in stocks showing strength. We either exit or hold positions where uncertainty remains,” said Viraj Gandhi, CEO, SAMCO Mutual Fund.
Still, not everyone is throwing caution to the wind.
“Markets seem to have discounted most negatives for now. But investors should tread carefully—fresh entries should be made in tranches rather than all at once,” said Aamar Deo Singh, Sr. VP – Research at Angel One.
“The silver lining is that much of the bad news is priced in. Unless a Black Swan event emerges, staying long while keeping an eye on valuations is the prudent path forward.”
With every session, the market seems to be sending a clear message: this rally might not wait.
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