India became the first emerging market to recover from the April 2 global sell-off triggered by US tariff concerns. In a strong show of resilience, Indian equities added a staggering ₹10 lakh crore in market capitalisation over just 13 trading sessions. This rally was primarily driven by a surge in largecap stocks and foreign institutional investor (FII) inflows.
Foreign institutional investors made a pronounced return to Indian equities, purchasing shares worth ₹40,644 crore during this period. This influx of global capital signalled growing confidence in India’s macroeconomic and corporate fundamentals. In contrast, domestic institutional investors displayed a more measured approach, adding ₹6,719 crore to their equity positions amidst intermittent volatility.
Largecap stocks were the standout performers, contributing a massive ₹8.6 lakh crore to the total market cap addition. These industry leaders were the primary beneficiaries of renewed FII interest, thanks to their liquidity, strong earnings visibility, and relative safety in uncertain global conditions.
Read More: Large Cap Stocks – List of Large Cap Stocks to buy in India.
Midcap stocks followed with ₹1.9 lakh crore in gains, while smallcap and microcap segments experienced capital erosion. Smallcaps saw an outflow of over ₹25,000 crore, and microcaps registered a higher selloff exceeding ₹45,000 crore highlighting a clear shift in investor preference towards safety and scale.
Among the top contributors to the surge in market capitalisation:
These figures underscore the dominance of sectoral leaders in telecom, IT, financials, and diversified conglomerates during the recovery phase.
While large and midcap stocks basked in investor optimism, the sharp selloff in small and microcap stocks reflected heightened caution. Valuation concerns, regulatory scrutiny, and risk aversion among institutional investors may have contributed to this divergence. The contrasting performance between market segments underlines the selective nature of the current uptrend.
The ₹10 lakh crore boost in market capitalisation, led by largecaps and driven by robust FII activity, marks a significant phase in India’s market narrative. It demonstrates investor conviction in the strength of India’s corporate giants while reminding participants of the underlying volatility and selectivity that continue to shape the broader equity landscape.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 7, 2025, 3:02 PM IST
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