FIIs remain net seller this week, domestic investors provide cushion
Mumbai, May 23
Foreign institutional investors remained net sellers this week, offloading Rs 7,570 crore based on provisional exchange data as domestic institutional investors were net buyers, purchasing Rs 16,950 crore, providing enough cushion.
In the month of May, FIIs have sold a cumulative Rs 32,230 crore, while DIIs have bought Rs 56,870 crore, based on provisional exchange data.
FIIs were net buyer on Monday's session with inflow of Rs 2,810 crore.
"However, they turned net seller in the remaining four sessions of the week with outflow of Rs 10,380 crore. DIIs remained net buyer in all the five-trading session during last week with net inflow of Rs 16,950 crore," said Pabitro Mukherjee, Associate Vice President- Research, Bajaj Broking.
Benchmark indices traded choppy with high volatility swinging between gains and losses as investors navigated heightened market uncertainty and mixed cues across sectors.
Nifty during last week traded in the broad range of 23,300-23,850, with the index testing the upper and lower band on multiple occasion and finally close the week at 23,719 levels, up by 0.3 per cent.
According to analysts, the currency backdrop continues to remain a structural concern. Despite resilience in global equities, the Indian rupee continues to trade near weak levels against the US dollar.
Persistent currency weakness not only heightens imported inflation risks but also keeps foreign institutional investors cautious towards emerging markets such as India.
"As a result, broader market stability continues to rely significantly on domestic institutional inflows absorbing periods of FII-led selling pressure," they said.
Investor sentiment remained cautious due to persistent geo-political tensions, which continued to keep crude oil prices elevated.
Meanwhile, a sharp rise in bond yields, driven by concerns over rising inflation and the possibility of prolonged higher interest rates, kept investors on edge.
Overall, global uncertainty and macroeconomic headwinds led to cautious trading activity across the markets. Looking ahead, institutional flows are likely to remain sensitive to developments around US-Iran tensions, oil-price movement, said analysts.
— IANS
Reader Comments
The article mentions rupee weakness as a big concern. With oil prices high and US Fed likely to keep rates elevated, FIIs will remain cautious. Our reliance on DIIs is a bit risky in the long run. Just my two paise. 🤔
Interesting dynamic. FIIs selling ₹7,570 crore but DIIs buying ₹16,950 crore. Indian domestic investors are showing real confidence. Though I'd keep an eye on the rupee vs dollar trend.
DIIs are the real MVPs! Our mutual fund SIPs and insurance money is keeping the market afloat. FIIs come and go but we are here for the long haul. Btw, the volatility is giving me a headache. 🥴
The geo-political angle with US-Iran tensions and oil prices is what worries me most. We import most of our oil, and any spike will hurt everything from inflation to corporate earnings. Not a good time for aggressive buying.
Respectfully, I think the article glosses over the bigger picture. FIIs are selling because Indian valuations are high compared to other EMs. DIIs are buying due to SIPs and retail frenzy, but that can reverse if sentiment turns. Caution advised.
S Siddharth J < We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.