Nifty earnings growth outpaces forecasts as FII selling eases

The Nifty 50 index has surpassed the 24,000 level on the back of earnings growth that has exceeded analyst expectations, with corporates delivering an 18% year-on-year earnings expansion. The positive earnings trajectory has provided support to the benchmark even as foreign portfolio investors, who had been consistent sellers, appear to have paused their offloading activities.

The shift in FPI sentiment marks a potential turning point for the market after weeks of sustained outflows that had weighed on sentiment. Analysts attribute the steadier momentum to growing confidence in domestic earnings resilience and a more balanced valuation outlook for Indian equities.

Investing professionals remain bullish on non-headline segments of the market. According to market participants, mid-cap and small-cap allocations continue to attract tactical positioning, with some portfolio managers maintaining exposure levels at around 50% in these segments. The conviction reflects expectations that smaller companies may deliver outsized earnings growth as the economic cycle matures.

The combination of robust corporate earnings, stabilized FPI flows, and selective exposure to higher-growth segments suggests that domestic investors are building conviction despite macro headwinds. Market observers will continue to monitor FPI activity and quarterly earnings trajectory as key indicators for near-term market direction.