India&rsquo;s stock market has received a double dose of positive signals that could reshape foreign investor sentiment in the coming weeks. Analysts believe the easing of geopolitical stress between the US and Russia and a ratings upgrade by S&amp;P Global will help counterbalance recent concerns over trade and earnings.
Market watchers point out that the threat of a 25 per cent secondary tariff on Indian exports, previously expected to take effect from August 27,&nbsp; now appears unlikely in light of improving US-Russia relations. This reduction in risk is expected to soothe foreign institutional investors (FIIs), who have been steadily pulling out funds in recent weeks.
Adding to the optimism, S&amp;P Global has raised India&rsquo;s sovereign credit rating from BBB- to BBB, a symbolic but significant move that enhances the country&rsquo;s standing in global financial markets. Experts say this upgrade will reinforce confidence among international investors, especially at a time when valuations are elevated and earnings growth projections remain modest.
Despite the strong support from domestic institutional investors (DIIs), who have infused over ₹55,000 crore into equities so far this month, the market has underperformed global peers for six consecutive weeks due to FII outflows amounting to ₹24,190 crore. Analysts caution that the real momentum will depend on whether foreign investors return in the wake of these developments.
Sectoral trends remain mixed. IT stocks have borne the brunt of sustained FII selling, dragging down the tech index, while banking and financial shares have held firm, supported by reasonable valuations and steady institutional demand.
Still, Indian equities ended their losing streak this week, with benchmark indices closing higher. The Sensex settled at 80,597.66 points and the Nifty finished at 24,631.30, both gaining nearly one percent in a holiday-shortened trading period.
Macro indicators also played their part in boosting sentiment. Retail inflation cooled sharply to 1.55 per cent in July, the lowest since June 2017, thanks to falling food prices. Wholesale inflation, meanwhile, remained in negative territory at &ndash;0.58 per cent for the second consecutive month, underscoring that price pressures remain under control.
With global risk factors easing and domestic fundamentals showing resilience, analysts suggest the Indian market could be poised for renewed FII inflows, though caution persists given patchy earnings and short-term volatility.

India gets FII boost from S&P, US-Russia thaw

Credit rating upgrade and easing global tensions lift investor sentiment in India

India gets FII boost from S&P, US-Russia thaw

Credit rating upgrade and easing global tensions lift investor sentiment in India

August 16, 2025 | 17:14 IST