FIIs net buy equities worth ₹526 crore after 2 sell-off sessions

As per the data of NSDL, FIIs made a net purchase of ₹5,465.61 Cr in Indian stock market on Tuesday and sold to a gross of ₹4,939.81 Cr, recording a net inflow of ₹525.80 Cr. This came after two consecutive days of selling bias from FIIs including last week, on Friday, FIIs sold ₹624.61 crore as well as a sell-off of ₹158.95 Cr on Monday. Between February 10th and 16th, FIIs were net buyers, marking a net inflow of ₹6,088.48 crore in Dalal Street.

K Dileep, Head of PMS at Geojit Financial Services said “FIIs were net buyers today to the tune of 525.8 crores while DIIs were net sellers for 232.23 crores. With this, FIIs were net buyers In 6 out of 8 trading sessions starting from February 10th. Market is not getting benefit out of this, the reason being increased selling from the retail investors. The Adani effect is still there in the market especially in banking space. Once the noise settles down, the retail investors will likely be net buyers. In fact our market is currently under performing against the global markets. I expect this to reverse soon. We have seen this cycle in the past as well.”

Whereas, DIIs made a net purchase of ₹5,318.43 Cr and made a gross sale of ₹5,553.66 Cr, taking to a net outflow of ₹235.23 Cr in Indian equities on Tuesday. In the previous session, DIIs were the net buyers with an inflow of ₹86.23 Cr on Monday.

Sunil Damania, Chief Investment officer, MarketsMojo said net selling by FIIs in February was lower compared to January. Hence, we are witnessing some relief from FIIs. We are confident that India Inc will continue to perform very well in 2023 based on India’s growth potential, India Inc data, and post-results commentaries. Furthermore, because India would be a shining star among global economies, foreign institutional investors (FIIs) would merit the opportunity to invest in India. FIIs have net sold approximately Rs.1.5 lac crores since 2022. As a result, whatever selling had to take place has already taken place. Therefore, we are of the opinion that only one outcome is possible: positive FII movement.

According to Utkarsh Sinha managing director Bexley advisors a boutique investment bank firm, two days of outflows should not be construed to be a trend; while there are significant turns in global and local trends that weaken the attractiveness of Indian markets (like rising interest regimes, weakening growth expectations), the truth is that India still remains a significant destination of global return-seeking capital. This is largely a function of the still high comparative growth rate, the predictable regulatory regime and the relative ease of capital repatriation. That said though, this isn’t time for complacency either, as a weakening of any of these three factors – a question mark for example on the fundamental strengths and fairness of markets – can cause a sudden and precipitous turn off flow of capital that would be hard to arrest. These events happen on large scales; the best course of action is often to keep ‘er steady to ride the wave, rather than be adventurous and breach the hull.

On Tuesday, NIFTY closed at 17,826.70 level, down by 17.90 points or 0.10%. All sectoral indices except Nifty IT up by 0.5% and Nifty Auto up by 0.3% ended on a negative note. The three biggest underperformers, which each saw a decline of 1.1%, were Nifty Oil & Gas, Nifty PSU Bank, and Nifty Bank. Commenting on the outlook of Nifty, Rupak De, Senior Technical Analyst at LKP Securities said “Nifty ended flat following a volatile trading session. The bias remains negative as it falls back into the descending channel on the daily chart. Besides, the momentum oscillator RSI has entered a bearish crossover. On the lower end, immediate support is visible at 17750, below which the selling pressure may increase.”

For Wednesday trade, Rohan Shah-head technical analyst at Stoxbox said “In the intraday sessions, Nifty managed to trade below the 17,900 mark after hitting the day`s high of 17,924.90 in morning trade & remain down throughout the day. Nifty is taking support at 17,830 a couple of times. Intraday traders can look for long opportunities only above the 17,890 level on Wednesday & the price should sustain above 17,890 for 15 minutes to confirm long. Traders can look for short only if nifty breaks the 17,800 again & remains below for 15 min to confirm short.”

Whereas, Sensex closed today at 60,672.72 levels, down by 18.82 points or 0.031%. The worst underperformers were Tata Motors, Sun Pharma, Wipro, Tata Consultancy Services, UltraTech Cement, Tech Mahindra, Bajaj Finserv, HCL Technologies, Infosys, and IndusInd Bank, whereas the major winners were NTPC, Power Grid, Reliance Industries, Tata Steel, HDFC, and HDFC Bank under BSE Sensex.