Current volatility reflects recalibration rather than collapse, lesson for investors should be composure

Atentative calm has returned to Dalal Street, though few would mistake it for conviction.

- RITWIK MUKHERJEE

After three consecutive months of relentless selling, Foreign Institutional Investors (FIIs) have turned net buyers in February, infusing nearly $1.7 billion into Indian equities.

The immediate trigger appears to be greater clarity on the India-US trade arrangement, which has eased policy uncertainty and steadied ris! sentiment. Yet, as Pranay Aggarwall, Director and CEO of Stoxkart, astutely observes, this looks less like a structural pivot and more like a cautious reallocation.

The context matters. For much of the year, foreign flows have remained negative, reflecting global headwinds rather than domestic frailty. Elevated US bond yields, a resilient dollar, and ambiguity around the trajectory of American interest rates have kept emerging markets on a tight leash. Against that backdrop, the recent inflows into India may simply represent tactical positioning rather than a decisive endorsement of valuations or earnings prospects.