Home / Business and Economy / India Equity Market Braces for Potential Relief Rally Amid Easing Tensions
India Equity Market Braces for Potential Relief Rally Amid Easing Tensions
10 Sep
Summary
- Foreign investors may pause selling and see some inflows
- Easing geopolitical tensions and lower oil prices could improve sentiment
- Domestic growth will be key for sustained market gains
In September 2025, the Indian equity market appears poised for a potential relief rally as foreign investors, who have been net sellers in recent months, may finally take a pause. According to experts, India could be at an inflection point as global and domestic factors start to align.
Neeraj Seth, Founder and CIO of 3R Investment Managers, has stated that he expects to see a pause in selling and even some reversal in foreign portfolio flows. This optimism is driven by easing geopolitical tensions and the prospect of lower crude oil prices, both of which could improve investor sentiment towards India.
Another factor providing relief to the market is the shift in tone from US President Donald Trump on trade talks with India. Arvind Sanger, Managing Partner at Geosphere Capital Management, has described this development as "quite encouraging," though he cautioned that negotiations could still face challenges.
Despite the potential for a relief rally, experts agree that the trajectory of India's equity market will ultimately hinge on the strength of its domestic growth story. Neeraj Seth noted that while global flows may turn supportive, "the domestic growth story will prevail post the initial relief rally."
Arvind Sanger also highlighted that the resolution of trade tensions could ease concerns around Indian IT outsourcing and H-1B visas, which have been a source of worry for the sector. However, he emphasized that sustained gains in the market will depend on the overall health of the Indian economy.
