India remains resilient amid global shocks as domestic investors anchor markets: Report
New Delhi, June 24
Despite facing one of the most challenging external environments in recent years, India's equity markets demonstrated remarkable resilience during May 2026, supported by strong domestic investor participation, broad-based earnings growth and robust macroeconomic fundamentals, a report said on Wednesday.
The data compiled by PL Asset Management noted that May was characterised by two sharply contrasting global narratives. While investors across developed markets poured capital into artificial intelligence and semiconductor-driven stocks in the United States, South Korea and Taiwan, India confronted multiple external pressures, including a surge in crude oil prices, currency weakness and elevated wholesale inflation.
Despite these challenges, Indian equities displayed notable resilience. The Nifty Midcap 150 gained 2.60 per cent and the Nifty Smallcap 250 advanced 1.56 per cent during the month, even as the benchmark Nifty 50 declined 1.87 per cent.
Foreign institutional investors remained net sellers for the eleventh consecutive month, withdrawing approximately Rs 55,963 crore from Indian markets during May. Domestic institutional investors, however, invested Rs 82,668 crore, fully offsetting foreign outflows. Cumulative domestic institutional purchases during calendar year 2026 crossed Rs 4.16 lakh crore.
The report described this trend as a structural transformation in Indian markets, with domestic investors increasingly emerging as a reliable stabilising force during periods of global uncertainty. Domestic ownership in Indian equities has risen to a record 18.9 per cent, while foreign institutional ownership has declined to 14.7 per cent, its lowest level since June 2012.
Corporate earnings also remained supportive.
The Reserve Bank of India maintained the repo rate at 5.25 per cent in its June policy meeting, marking the third consecutive pause following cumulative rate cuts of 125 basis points since February 2025. The report noted that benchmark Nifty valuations have corrected to nearly 11 per cent below their five-year average, creating what it described as one of the most attractive entry points in recent years.
Commenting on the outlook, Siddharth Vora, Fund Manager and Head of Asset Management at PL Capital, said global market leadership has become increasingly concentrated in artificial intelligence and semiconductor-related stocks, particularly in South Korea, Taiwan and the United States.
— IANS
Reader Comments
This is a great sign of India's maturing economy. For years, we relied on foreign money. Now, it's our own people and institutions investing in our growth. The real test will be when global uncertainties are even bigger. Let's see if we can hold the fort then. Fingers crossed! 🤞
The RBI's decision to pause rate cuts makes sense. We need to control inflation before anything else. But I'm a bit skeptical about the Nifty valuations—11% below the 5-year average sounds good, but is it really an 'attractive entry point' when global headwinds are so strong? Let's be cautious.
I'm in my 30s and have been investing in mutual funds for the last 5 years. Seeing smallcap and midcap indices gain while the broader Nifty falls actually makes sense—domestic investors are looking beyond the heavyweights. The structural shift is real. India is finally building its own wall against global storms. 🇮🇳
The report says domestic ownership is at a record 18.9% and foreign at a 12-year low. This is the kind of self-reliance we need—Aatmanirbhar Bharat in finance! But we must ensure retail investors are educated. Too many chase tips rather than fundamentals. The market may be resilient, but individual traders need to be careful.
Interesting that the article highlights AI and semiconductor stocks dominating in the US, while India shows broad-based resilience. It is good that our market is not just dependent on one sector. But we still need to build our own chip ecosystem. Hope the government's PLI schemes
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.