ETMarkets Smart Talk| FII comeback will be key trigger for next rally in Indian markets: Saibal Ghosh

Banking and financial services are highlighted as key beneficiaries of potential FII inflows, driven by India's strong domestic growth narrative. Recent resilience of PSU banks in FY26 despite headwinds underscores sector strength.

Maintain a bullish bias on banking and financial services; look for opportunities in fundamentally strong banks with good NIM and asset quality.

For Indian markets, this story mainly matters for the Banking, Financial Services pocket. The current signal is bullish, so traders should watch whether the effect spreads across the sector or stays limited to a single name.

Watch whether the market validates this read through price action, volume, and breadth. If the headline matters, the signal should show up in execution, not just in commentary.

• •FII comeback is identified as the key trigger for the next rally in Indian markets.
• •India's long-term growth story remains strong despite recent volatility.
• •A cooling of global AI hype could draw foreign funds back to India.
• •Investors should focus on domestic growth, specifically banking and financial services.
• •Gold is suggested as a hedge against uncertainty with a structural allocation.