Indian stock market faces volatility as FIIs buy and Sensex drops

The Indian stock market experienced significant volatility, marked by a shift in foreign institutional investor (FII) behavior and a sharp single-day decline. On one Friday, FIIs turned into net buyers, investing 1,166 crore rupees in equities, signaling a potential stabilization in market sentiment despite a weekly net selling trend.

However, this momentum was interrupted on Monday, when the market faced a heavy sell-off. The Sensex dropped by 538 points, and the Nifty fell by over 175 points. This sudden downturn resulted in a loss of approximately 3.23 lakh crore rupees in total market capitalization for companies listed on the BSE.

Analysts suggest that while the reversal in fund flows from FIIs is a positive sign, external risks such as high Brent crude oil prices, geopolitical tensions between the US and Iran, and upcoming RBI monetary policy minutes continue to influence investor caution.