Markets end lower after RBI policy as foreign fund outflows weigh on sentiment
Indian equities settled lower in a session marked by profit-taking and persistent foreign institutional selling after the RBI policy, as investors tracked mixed earnings, banking and FMCG weakness, and continuing outflows from overseas funds.
- Reporting desk
- Health India Network News Desk
- First published
Profit-taking and FII outflows keep investors cautious
Indian equity benchmarks ended lower after the Reserve Bank of India’s policy announcement, with market sentiment dampened by continued foreign fund outflows and a fresh round of profit-taking across several sectors. Investors weighed the central bank’s policy stance and commentary alongside corporate earnings that were described as mixed to subdued in parts of the market.
Market participants said the RBI decision itself did not deliver a major surprise, and that the tone of the policy communication did not spark a new buying trigger. In that backdrop, traders rotated out of pockets that had rallied earlier, with selling pressure seen in segments such as banking, oil & gas, FMCG and power, as risk appetite softened over the course of the session.
Stock-specific moves and earnings focus
Among key counters highlighted in reports, ITC declined after posting a drop in consolidated net profit for the December quarter, attributed to subdued demand and higher input costs. Other heavyweights also featured among laggards, reflecting a broader ‘wait and watch’ approach as investors assessed quarterly numbers and forward commentary from companies.
At the same time, select stocks showed resilience, indicating that investors are still willing to pay for strong results or favourable business updates even in a weak tape. Analysts tracking flows said persistent selling by foreign institutional investors has been a key overhang, pushing many domestic participants to maintain a defensive stance until there is clearer direction on global rates and risk sentiment.
What investors are watching next
- Whether foreign portfolio outflows ease or accelerate in the coming sessions.
- How the rest of the earnings season shapes expectations for FY26 growth.
- RBI commentary on inflation, liquidity and growth, and how markets interpret the policy path.
For now, the market mood remains sensitive to flows and earnings headlines, with traders likely to respond quickly to any shift in global cues, policy signals, or large-cap results that alter expectations on growth and valuation support.