All indicators seem to be pointing towards a sustained rise in stock market. A positive inflation outlook (subject to good monsoons) remains crucial to Indian markets. The RBI's (long) pause has boosted market sentiment turning investors towards equity markets, away from bond markets. This has been instrumental in foreign investors returning to India since March 2023.
Another reason for a robust and renewed FII interest has surely been a tepid China revival. Reopening of China has not quite paid off as initially expected and FIIs see India in a more positive light on a comparative basis at this stage.
For FIIs, attractiveness of India as an investment opportunity is rooted in the country's robust growth potential underpinned by resilient financial results (at a broad-based level) and continued political stability While the current rally shows little signs of slowing down, retail investors must continue investing in well-managed funds via SIPs.