Has FII sentiment towards India weakened? Raamdeo Agrawal shares his view
On valuations, the market veteran said the recent correction had made Indian equities more reasonable from a historical perspective, while the earnings outlook remained encouraging.
- Nov 5, 2026,
- Updated Nov 5, 2026 3:22 PM IST
Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services Ltd (MOFSL), believes earnings growth will remain the key determinant of the Indian stock market's recovery, even as global sentiment towards India remains weak amid concerns over foreign investor flows, geopolitical tensions and trade-related uncertainties.
Responding to Business Today's question on whether global sentiment towards India had deteriorated to its worst level in recent times, the market veteran said he believed so, pointing to the contrasting trends in domestic institutional investor (DII) inflows and foreign institutional investor (FII) outflows.
Agrawal cited FII selling of around Rs 8.5 lakh crore against DII buying of around Rs 5 lakh crore during Samvat 2082.
However, he mentioned that the market's direction was not determined solely by the identity of buyers and sellers. He identified corporate earnings and, to some extent, interest rates as the more important factors influencing market levels.
On valuations, he said the recent correction had made Indian equities more reasonable from a historical perspective, while the earnings outlook remained encouraging. The expert sees this combination as supportive of the market, given the prospects for corporate earnings growth.
Agrawal also highlighted crude oil prices and trade-related uncertainties as the two key external factors influencing India's economic outlook. He said a stable geopolitical environment, smoother global trade and reasonable crude oil prices would provide a favourable backdrop for the domestic economy.
Emphasising the importance of oil prices, he said a meaningful correction in crude would ease economic concerns for India, regardless of the outcome of geopolitical developments. He added that domestic consumption and the underlying strength of the economy could support growth if these external conditions remained favourable.
However, elevated oil prices could make the market recovery slower and more hesitant, even if corporate earnings remained strong, Agrawal cautioned. He said concerns over a possible weakening of the rupee could continue to weigh on foreign investor sentiment and market confidence.
Agrawal expects the market to navigate these concerns, while underscoring that a sharp decline in crude oil prices would make the recovery more confident.
Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services Ltd (MOFSL), believes earnings growth will remain the key determinant of the Indian stock market's recovery, even as global sentiment towards India remains weak amid concerns over foreign investor flows, geopolitical tensions and trade-related uncertainties.
Responding to Business Today's question on whether global sentiment towards India had deteriorated to its worst level in recent times, the market veteran said he believed so, pointing to the contrasting trends in domestic institutional investor (DII) inflows and foreign institutional investor (FII) outflows.
Agrawal cited FII selling of around Rs 8.5 lakh crore against DII buying of around Rs 5 lakh crore during Samvat 2082.
However, he mentioned that the market's direction was not determined solely by the identity of buyers and sellers. He identified corporate earnings and, to some extent, interest rates as the more important factors influencing market levels.
On valuations, he said the recent correction had made Indian equities more reasonable from a historical perspective, while the earnings outlook remained encouraging. The expert sees this combination as supportive of the market, given the prospects for corporate earnings growth.
Agrawal also highlighted crude oil prices and trade-related uncertainties as the two key external factors influencing India's economic outlook. He said a stable geopolitical environment, smoother global trade and reasonable crude oil prices would provide a favourable backdrop for the domestic economy.
Emphasising the importance of oil prices, he said a meaningful correction in crude would ease economic concerns for India, regardless of the outcome of geopolitical developments. He added that domestic consumption and the underlying strength of the economy could support growth if these external conditions remained favourable.
However, elevated oil prices could make the market recovery slower and more hesitant, even if corporate earnings remained strong, Agrawal cautioned. He said concerns over a possible weakening of the rupee could continue to weigh on foreign investor sentiment and market confidence.
Agrawal expects the market to navigate these concerns, while underscoring that a sharp decline in crude oil prices would make the recovery more confident.