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Foreign institutional investors (FIIs), who started fleeing India after Nifty hit record high in September-end, are now on a course correction path. After selling Indian stocks worth Rs 116,437 crore in the one-and-a-half month period beginning October, FIIs ended up being buyers to the tune of Rs 809 crore last fortnight.December month saw acceleration in the pace of buying as FIIs have pumped in around Rs 23,500 crore so far in the month."With GDP and earnings growth expected to exceed the global average and may outperform many other emerging markets, India seems well-positioned to continue attracting significant capital inflows. Consequently, driven by its robust economic prospects and strong fundamentals, India may remain a key destination for investment in the medium to long term," LIC Mutual Fund's Karan Doshi told ETMarkets.Also read | Main Jhukega Nahi! Why Sensex is up 2,700 points in 5 days despite twin Q2 shockersWhich stocks FIIs are buying and selling?NSDL data shows that financial services was on top of the buying list of FIIs in the second half of November. After selling financial stocks worth Rs 7,092 crore in the first fortnight of the month, FIIs took a U-turn and spent Rs 9,597 crore on the sector in the second fortnight.<iframe title="FIIs fixing billion-dollar blunder" aria-label="Table" id="datawrapper-chart-y35Zv" src="https://et-infographics.indiatimes.com/graphs/y35Zv/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="644" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>HDFC Bank is believed to have been the biggest beneficiary of FII flows as the stock is up over 6% in the last one month and is the best performing stock among other Nifty Bank peers.This week, HDFC Bank's market capitalization crossed the Rs 14 lakh crore market capitalization for the first time and also hit fresh record highs.This surge was fueled by extraordinary trading volumes linked to MSCI's November rebalancing, which increased the bank’s index weightage and attracted an estimated $1.88 billion in passive inflows.Besides banks, IT, FMCG and real estate stocks also attracted FII attention. On the other hand, foreigners continued to sell oil and gas, auto and telecom stocks.What should investors do?The recent non-stop rally in Sensex and Nifty for previous 5 consecutive sessions has rekindled animal spirits on Dalal Street once again with bulls betting that the market may even touch record highs this month as FIIs are playing Santa.Quant Mutual Fund said it is beginning to see early signs of a revival. "The timing is right to become constructive on the markets and selectively build positions in certain segments of the market, which has the potential to recover faster," said Quant's Sandeep Tandon.Japanese brokerage Nomura sees near-term risk for Indian equities on slowing macro and earnings momentum but has maintained a structurally positive view.Dipan Mehta of Elixir Equities is cautious on the market and is trying to raise cash levels as high valuations and slowing down of growth may pull the market back."Unless those two issues are addressed, I would not be completely confident that we have entered a new phase of the bull market. So one needs to be a bit careful over here and selectivity is the key. Trying to play safe in this market, I think that is a good strategy," he said.(Data: Ritesh Presswala)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

The Reserve Bank of India (RBI) on Friday announced its latest monetary policy decisions. This followed a three-day meeting that began on December 4.The Monetary Policy Committee (MPC) members include Shaktikanta Das, Governor of the Reserve Bank of India (RBI); Michael Debabrata Patra, Deputy Governor, RBI; Rajiv Ranjan, Executive Director, RBI; Ram Singh, Director, Delhi School of Economics; Saugata Bhattacharya, Economist; and Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development.Here are the key highlights from the MPC meeting:Monetary policy decisionsThe policy repo rate remains unchanged at 6.50% under the liquidity adjustment facility (LAF).The standing deposit facility (SDF) rate stays at 6.25%, and the marginal standing facility (MSF) rate and Bank Rate are steady at 6.75%.The MPC decided to maintain a neutral stance, aiming to keep inflation under control while promoting growth.The target is to achieve 4% CPI inflation (with a margin of ±2%) over the medium term, ensuring both price stability and economic growth.Growth outlookThe global economy is stable but growing slowly, with inflation decreasing, the RBI noted.Geopolitical risks and trade policy uncertainties are causing more volatility in global financial markets.In India, GDP growth in Q2 2024-25 was lower than expected at 5.4%, mainly due to reduced private consumption and investment, although government spending recovered.Services and agriculture sectors showed resilience, but weak industrial activity (manufacturing, electricity, mining) affected overall growth.Positive factors ahead include good kharif production, better rabi prospects, improving industrial activity, and strong services.Real GDP growth is projected at 6.6% for 2024-25, with Q3 at 6.8%, Q4 at 7.2%, and for H1 2025-26 at 6.9% (Q1) and 7.3% (Q2).Inflation outlookCPI inflation rose to 6.2% in October, above the tolerance limit, due to higher food prices and rising core inflation.Food inflation is expected to ease in Q4, helped by seasonal vegetable price drops, kharif harvests, and good rabi conditions.Upside risks include adverse weather, rising global agricultural prices, and potential increases in energy costs.CPI inflation for 2024-25 is projected at 4.8%, with Q3 at 5.7%, Q4 at 4.5%, and for H1 2025-26 at 4.6% (Q1) and 4.0% (Q2).Risks to both growth and inflation are balanced.RBI cuts CRR by 50 bps to 4%The MPC announced a 50 basis points reduction in the Cash Reserve Ratio (CRR), bringing it down to 4%. The CRR represents the portion of a bank's deposits that must be maintained as reserves with the RBI.RBI to raise interest rate ceilings on FCNR-B depositsThe RBI announced an increase in the interest rate ceilings on FCNR-B deposits, effective immediately. This move, accompanied by higher FCNR deposit rates, aims to boost foreign capital inflows into India. While Foreign Portfolio Investment (FPI) inflows to Emerging Market Economies (EMEs) generally declined in October, India has recorded net FPI inflows of $9.3 billion in FY25 so far.Rationale for decisionsRecent inflation and growth outcomes in India have become less favorable since October, the RBI stated. Economic activity is expected to improve, backed by better business and consumer sentiments reflected in RBI surveys.Inflation risks remain high due to overlapping shocks, geopolitical uncertainties, and market volatility.High inflation impacts consumer purchasing power, especially in rural and urban areas, and could hurt private consumption.Durable price stability is crucial for long-term high growth, prompting the MPC to keep the repo rate unchanged at 6.50%.The MPC maintained a neutral stance, allowing flexibility to address inflation and growth as needed.Repo rate decisionVoted to keep the repo rate unchanged: Shaktikanta Das, Saugata Bhattacharya, Rajiv Ranjan, Michael Debabrata Patra.Voted to reduce the rate by 25 basis points: Nagesh Kumar, Ram Singh.Neutral stance decisionUnanimous support from all members for continuing the neutral monetary policy stance.Additional announcementsCollateral-free loan for agriculture sector raised to Rs 2 lakh per borrower from Rs 1.6 lakh.Small finance banks permitted to extend pre-sanctioned credit lines through UPI.Mule-Hunter AI: RBI launched a tool named Mule-Hunter AI to detect and prevent mule accounts.RBI to launch podcasts for wider dissemination of information to general public.Next MPC Meeting: Scheduled from February 5 to 7, 2025.