Business EconomyPosted at: Jul 13 2026 1:43PM


Foreign selling in Indian equities likely over: Goldman Sachs

New Delhi, Jul 13 (UNI) Foreign selling in Indian equities is likely behind us, with sentiment expected to turn incrementally favourable as India's domestic outlook improves and overseas investor positioning remains exceptionally light, according to Goldman Sachs' July India Strategy note.
The global investment bank expects the benchmark Nifty 50 index to climb to 26,500 by June 2027, implying an upside of around 10 per cent from current levels, despite the likelihood of continued market volatility due to renewed geopolitical tensions in West Asia.
"Sentiment should turn incrementally favourable toward Indian equities due to an improved domestic outlook and ultra-light foreign positioning," analysts led by Timothy Moe wrote in the report, co-authored with Amorita Goel and Sunil Koul.
The July outlook marks a significant shift from Goldman Sachs' stance in May 2026, when it had described the risk-reward equation for Indian equities as "less attractive" compared with North Asian markets.
At the time, the brokerage had also said foreign investors were unlikely to return to India quickly, even if crude oil prices softened.
In its May note, Goldman Sachs had highlighted concerns that the potential impact of artificial intelligence (AI) on India's services sector was weighing on investor sentiment toward Indian equities.
According to the latest report, global equity investors used India as a funding market during the first half of 2026, offloading a record USD 30 billion worth of Indian equities over just three-and-a-half months. However, the trend has started reversing since mid-June, with overseas investors turning modest net buyers and bringing in around USD 2 billion, largely into financial stocks.
The improved outlook comes even as foreign institutional investors (FIIs) remain net sellers on a fiscal-year basis.
According to market data, FIIs have recorded a net outflow of Rs 1.28 trillion from Indian equities so far in FY27.
In June alone, overseas investors withdrew Rs 49,340 crore from Indian equities. The trend, however, reversed in July, with FIIs investing a net Rs 15,157 crore in Indian stock markets, according to NSDL data.
Goldman Sachs believes the combination of improving domestic macroeconomic conditions, easing foreign underweight positions and a gradual return of overseas flows could provide support to Indian equities over the coming year, although geopolitical developments are expected to keep markets volatile in the near term. UNI VK SAS
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