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Below the Views on Morning Market 12th December 2025 by Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited

A healthy feature of the investment behaviour of retail investors is the steady inflows into mutual fund SIPs, which have been consistently above 29000 crores during the last three months. This has strengthened the DIIs in the FIIs vs DIIs tug of war and has enabled the DIIs to absorb the sustained selling by FIIs. It would be difficult for the FIIs to sell continuously and maintain a high short position in the market in the context of healthy SIP inflows, particularly when the economy is doing well and the prospects for earnings growth are improving. It is important to understand that rupee depreciation, sustained FII selling, delay in the finalisation of US-India trade deal and the ongoing AI trade are all temporary drags on the markets. The most important factor that will dictate the direction of the market is the earnings growth, and this looks promising for FY 27. In December so far, FIIs have sold equity worth Rs 14845 crores through the exchanges. This sell figure has been completely eclipsed by the DII buying for Rs 36097 crores during this period. Sustained selling in India when the prospects for growth and earnings look bright is not a sustainable policy. This can lend support to the market.

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