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India equities see renewed FII buying as Hormuz risk lifts crude

The trade deficit widened to US$87 billion in Q1FY27, highlighting how any prolonged disruption to oil routes could pressure the rupee and inflation.

Reported · Written up by our desk · Trade & Tariffs

Foreign investors have started returning to Indian equities after a period of foreign selling and an earnings slowdown, with domestic liquidity remaining robust and corporate earnings holding up, especially among smallcaps in Q1FY27 results, according to LiveMint Markets.

LiveMint Markets said the shift coincides with easing AI concerns, plus renewed inflows into specific sectors. Indian IT recorded its first positive inflow in 2026 as foreign investors bought into the sector after a deep correction, driven by valuations.

At the same time, global developments are still a key driver for Indian markets through crude oil. Markets were rattled by renewed concerns about a possible closure of the Strait of Hormuz, with Brent crude briefly moving above US$90 per barrel and some moderation by week end.

LiveMint Markets added that any prolonged disruption could worsen India’s current account deficit, pressure the rupee and push inflation higher, affecting corporate profitability and household spending. It pointed to a widening trade deficit, to US$87 billion in Q1FY27 from US$67 billion in Q1FY26.

Latest closeWTI crude $82.40 ▲1.4%|Brent $88.59 ▲1.8%

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