Sensex Hits All-Time High as Foreign Funds Return: India Outshines Global Markets

Strong corporate earnings, easing inflation, and record FPI inflows push Indian equities to historic highs, reaffirming investor faith in the country’s growth story.

Mumbai | October 24 2025 | Business & Markets Desk, Sarhind Times

India’s benchmark indices scaled new peaks on Thursday, with the Sensex crossing 78,600 points and the Nifty touching 23,850, as foreign institutional investors (FIIs) poured in over ₹ 18,000 crore this month. The rally reflects global confidence in India’s resilient economy amid geopolitical uncertainty elsewhere.

Another Record Close for Dalal Street

Mumbai, October 24 – The Indian stock market sealed another record-breaking session on Thursday, extending a months-long rally that has made it one of the world’s best-performing major equity markets. At the closing bell, the BSE Sensex settled at 78,612, up 512 points (+0.66 %), while the NSE Nifty 50 ended at 23,847, up 161 points (+0.68 %). Market capitalisation of all listed companies on the BSE surged past ₹ 410 lakh crore ($4.9 trillion) — a new lifetime high.

What’s Driving the Rally

1) Foreign Portfolio Inflow Surge

According to depository data, FPIs have pumped ₹ 18,212 crore into Indian equities so far in October, reversing three months of outflows. “India is a structural growth story that looks attractive against a weak China and volatile emerging markets,” said Sonal Varma, Chief Economist, Nomura Asia. “Global investors see earnings resilience and policy continuity.”

2) Earnings Momentum

Quarterly results have beaten Street expectations in banks, automobiles and capital goods. Corporate profit-to-GDP has touched 4.9 %, the highest since 2008. Large caps like ICICI Bank, Larsen & Toubro, and Tata Motors led the charge with double-digit profit growth, while operating leverage improved across several midcaps.

3) Macroeconomic Stability

Retail inflation eased to 4.2 % in September, comfortably within the RBI’s target band. GDP growth for FY 2024-25 is projected at 7.2 %, supported by robust investment and services activity. A narrower current account deficit and healthy FX reserves have further buttressed sentiment.

4) Global Tailwinds

The U.S. Federal Reserve’s pause in rate hikes and Brent crude hovering near $78 per barrel have lifted risk appetite. While global equities remain selective, India continues to outpace Asian peers on both earnings and liquidity metrics.

Sectors on Fire

• Banking & Financials: Nifty Bank jumped 1.2 % on the day, driven by ICICI Bank, HDFC Bank and Axis Bank. Improving credit growth (~15 % YoY) and declining NPAs support valuation expansion.
• Capital Goods & Infra: L&T and Siemens hit fresh highs as government capex orders sustained; Street expects infrastructure spending near ₹ 11 lakh crore this fiscal.
• Auto: Tata Motors and Maruti gained on record festival-season bookings and improving mix.
• Technology: Infosys and TCS rebounded as rupee weakness aided exporter margins; order pipelines stayed resilient.
• Energy & Metals: Reliance Industries and Hindalco rose on improving global demand indicators.

Mid- and small-cap indices rallied over 1 %, pointing to broad market participation beyond index heavyweights.

Domestic Investors Hold Firm

While foreign flows sparked momentum, domestic mutual funds continued steady purchases. Systematic Investment Plan (SIP) contributions crossed ₹ 22,000 crore in September, an all-time record. Retail ownership in listed companies is estimated near 9 %, reflecting deepening financialisation of household savings.

“This rally is as much about the Indian middle class as it is about Wall Street money.” — Nilesh Shah, MD, Kotak AMC

RBI’s Calibrated Support

The Reserve Bank has kept the policy repo rate at 6.5 % for five consecutive meetings, balancing growth and inflation. Liquidity operations through variable-rate repos have stabilised short-term rates, supporting credit expansion without fuelling asset bubbles.

“The Indian economy is navigating global headwinds with resilience. We remain focused on price stability and sustainable growth.” — Shaktikanta Das, RBI Governor

Foreign Analyst Perspective

U.K.-based fund manager Emerging Global Investments (EMGI) termed India “the only large economy where macro and micro both align positively,” highlighting corporate tax cuts, PLI schemes, and political stability. Goldman Sachs raised its Nifty target to 25,200 for 2026, citing a “multi-year earnings cycle similar to the 2003-07 boom.”

Caution Amid Euphoria

Veteran broker Ramesh Damani urged discipline, noting that markets can correct 10-15 % without breaking the bullish trend. Analysts flagged risks from geopolitical flashpoints, monsoon variability, and a potential global manufacturing slowdown. A stronger U.S. dollar could also trigger short-term volatility in foreign flows.

“Markets can correct 10-15 % without breaking the bull trend. Investors must focus on quality and valuation.” — Ramesh Damani, Investor & Broker

Technical Outlook

Chartists see immediate support for Nifty at 23,400 and resistance near 24,000. Momentum oscillators signal overbought conditions but no reversal yet. The volatility index (VIX) slipped to 12.1, a three-year low, indicating strong bullish undertone. Derivatives data show heavy call writing at the 24,000 strike, suggesting a short pause before the next leg higher.

Long-Term Confidence: The Structural Setup

• Rising manufacturing share via “Make in India 2.0” and supply-chain diversification.
• Expanding digital and physical infrastructure enabling productivity gains.
• FDI pipeline in defense, renewables, and semiconductors supporting capex cycles.
• Continued policy stability and reforms in taxation, logistics, and insolvency.

“India is on a ten-year bull trajectory driven by earnings, not liquidity.” — Ridham Desai, MD, Morgan Stanley India

Voices from Dalal Street

Retail investor Priya Nair, a software engineer from Pune, shared her journey: “I started SIP during the pandemic when markets crashed. Today my portfolio is up 65 %. I won’t book profits — I believe India’s decade has just begun.” At Mumbai’s historic Horniman Circle, brokers celebrated with sweets as screens flashed green tickers. The mood recalled the 2004 bull run, updated for a digital age as traders posted memes and charts in real time.

International Context

Compared to global indices, India has outperformed comfortably so far this year. MSCI’s decision to raise India’s weight in the Emerging Markets index from 18 % to 21 % has further catalysed allocations from global funds rotating away from China and cyclically weaker geographies.

Strategists increasingly refer to India as “the new China” for emerging-market allocations, although they caution against simplistic parallels given India’s domestic-demand-driven model and reform cadence.

Corporate Voices on the Run-Up

“India’s market capitalisation reflects not just valuation but validation of our growth story — a confidence shared by 1.4 billion people.” — Mukesh Ambani, Chairman, Reliance Industries

“Digitisation and AI adoption are creating new profit pools in every sector. India is not just a services economy — it’s a smart economy.” — K. Krithivasan, CEO, TCS

The Road Ahead

Market strategists expect near-term consolidation but remain constructive for FY 2026. Baselines include Nifty EPS growth of 12–13 %, stable corporate leverage, and an expanding SIP base. With Budget 2026 expected to sustain public capex and incentives for manufacturing, the earnings cycle appears intact. If delivery remains robust and global rates stay benign, several brokerages see the Sensex crossing 80,000 by year-end.

Investor Checklist

1. Review asset allocation; diversify across large caps and select mid caps aligned to earnings upgrades.
2. Avoid FOMO trades; prioritize balance-sheet strength and cash-flow visibility.
3. Rebalance annually to crystalise gains and manage risk.
4. Use SIPs and STPs to average costs through volatility.
5. Maintain a 2-year perspective for equity compounding to work.

Key Data at a Glance

Conclusion: Confidence Meets Caution

India’s record-high markets mirror the economy’s momentum — resilient, reform-driven and increasingly digitised. While risks from geopolitics, weather, and global growth remain on the radar, the broader trend suggests the India growth story is far from over. As traders cheered on Dalal Street and investors checked their apps, one message stood clear in the ticker tape: India has arrived, and its markets know it.