DIIs offset FII selling as Indian markets rebound over 5 pc on ceasefire hope
New Delhi, April 11
Domestic institutional investors continued to provide crucial support to Indian equity markets this week, offsetting sustained selling by foreign institutional investors, as global sentiment improved after a reported US‑Iran ceasefire, exchange data showed.
FIIs offloaded equities worth Rs 20,710 crore during the week, while DIIs emerged as net buyers with investments totalling Rs 21,602 crore, helping benchmark indices recover over 5 per cent over the period, the data showed.
Analysts attributed persistent FII selling to global and macro-economic concerns, including geopolitical tensions, elevated crude oil prices, rupee weakness, rising global bond yields and inflationary pressures.
However, FIIs posted a net inflow of Rs 672 crore on Friday, marking their first positive session since February 25, but strategists cautioned that sustained follow‑through would be needed to signal a durable reversal in foreign sentiment.
Month‑to‑date data also showed a similar trend, with FIIs withdrawing Rs 38,973 crore from Indian equities, while DIIs investing Rs 35,983 crore.
While domestic institutions played the larger role, retail investors also remained active. Systematic investment plan (SIP) contributions from retailer into mutual funds hit a record Rs 32,087 crore in March.
The easing of tensions after the US President Donald Trump announced a two‑week truce with Iran, helped push crude prices lower and lifted investor risk appetite, market participants said.
Foreign institutional flows are likely to be driven by developments in US‑Iran negotiations, its impact on crude prices and corporate earnings.
Indian equity benchmarks closed in green for the second consecutive week, amid huge short covering due to the US-Iran ceasefire.
Nifty gained 5.89 per cent during the week and added 1.16 per cent on the last trading day to reach 24,050. At close the Sensex was up 918 points or 1.20 percent at 77,550. It gained 5.77 per cent during the week.
Bank Nifty overperformed the broader market, closing at 55,912, up 1.99 per cent on Friday. It posted a steep weekly surge of 8.47 per cent.
— IANS
Reader Comments
As an NRI investor, this is encouraging to see. The domestic institutional strength provides a much-needed cushion. However, the article rightly points out that one day of FII inflow isn't a trend reversal. Let's hope the ceasefire holds and crude stays down.
Bank Nifty up 8.5% in a week! 🚀 That's massive. Shows the resilience of our financial sector. DIIs stepping up when FIIs run away proves our economy isn't solely dependent on foreign money anymore. Aatmanirbhar in the markets too!
Good analysis, but a bit of a reality check needed. A 5% rebound is welcome, but Sensex is still below its peak. The underlying concerns about inflation and rupee weakness haven't vanished. We shouldn't celebrate too soon.
It's frustrating to see our markets swing based on tensions between two other countries. But kudos to the DIIs and retail investors for holding the fort. Our domestic money is becoming a powerful force.
Interesting dynamic. The data clearly shows a massive net withdrawal by FIIs month-to-date (~39k cr). The rebound seems driven more by short covering and hope than fundamental change. The next corporate earnings season will be the real test.
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