Following the US Federal Reserve's decision to maintain interest rates, Indian stock markets rebounded, raising hopes for a return of Foreign Institutional Investors (FIIs) after months of selling.
The Fed's dovish stance signals a potential influx of funds into emerging markets, with India poised to benefit. However, cautious optimism remains due to factors like geopolitical tensions and upcoming state elections. While active strategy FIIs remain bullish, passive strategies are influenced by the Fed's stance.
The financial services sector is favored, and sectors like capital goods and infrastructure show promise. Additionally, India's inclusion in the global bond index could lead to improved valuations and growth.