FII outflow moderates to ₹252 crore, DIIs infuse ₹823 crore as Nifty 50 reports weekly gain; What lies ahead?

As per the NSE data, FIIs cumulatively bought ₹6,583.57 crore of Indian equities, while they sold ₹6,845.38 crore — resulting in an outflow of ₹261.81 crore on Friday. Meanwhile, DIIs invested ₹6,239.42 crore and offloaded ₹5,416.78 crore, registering an inflow of ₹822.64 crore.

FIIs have sold Indian equities since October on record-high US bond yields, strength of the dollar index, and the geopolitical risks due to the Israel-Hamas war. These combined factors have since weighed on market sentiment. Foreign inflow continues to be muted over concerns of an elevated interest rate and a global slowdown.

Also Read: Down 4%, Nifty Midcap 150 declines more than Nifty 50 in October on global headwinds

Selling streak to reverse soon, FIIs may turn buyers

Analysts reckon that the Indian market continues to exhibit resilience even in the midst of several challenges and there is a growing concern among foreign investors that if they continue to sell, they will miss out on the potential rally in the Indian market. This might restrain the FIIs from selling heavily in the coming days.

‘’The Indian market texture indicates that the ‘buy on dips’ strategy will continue to work. In Samvat 2080, Financials are likely to do well supported by attractive valuations and impressive growth. Sustained FII selling in financials, which is impacting the sector, will be only temporary,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

‘’The FOMO ( Fear of Missing Out) factor is likely to restrain the FIIs from aggressive selling. This will be favourable for the financial sector which has been bearing the brunt of FII selling,” added Dr. V K Vijayakumar.

Stock Market Today

Domestic equity benchmarks Sensex and Nifty 50 settled higher on Friday supported by fag-end buying in select heavyweights, including HDFC Bank and ITC, despite weak global cues. Concerns over interest rate hikes persisted after Fed Chair Jerome Powell’s hawkish comment on Thursday while the Israel-Hamas continues.

Nifty 50 today opened at 19,351.85 against the previous close of 19,395.30 and touched its intraday high and low of 19,451.30 and 19,329.45 respectively, before ending at 19,425.35, up 30 points, or 0.15 per cent. 

The 30-share Sensex pack ended 72 points, or 0.11 per cent, higher at 64,904.68. Mid and smallcaps outperformed the benchmarks. The BSE Midcap index rose 0.33 per cent while the Smallcap index ended with a gain of 0.38 per cent.

“Selective buying helped markets end marginally higher despite other Asian and European counterparts struggling on the back of selling pressure. Foreign fund outflows from the domestic market have been of concern. Volatile US treasury yields have been prompting overseas investors to exit emerging markets over the past few months,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

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Where are markets headed?

Going into Samvat 2080, analysts expect markets would continue its outperformance on the back strong earnings and strong economic outlook.

‘’Nifty ended the Samvat 2079 on a positive note despite several global challenges. Nifty gained 9.4 per cent in this period and made a new life high crossing 20k mark for the first time,” said said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

‘’As we get into Samvat 2080, we believe markets would continue its outperformance on the back strong earnings and healthy economic outlook,” added Khemka.

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Updated: 10 Nov 2023, 07:25 PM IST