FIIs offload ₹6,240.5 crore in Indian equities this week, DIIs turn net buyers; What’s behind this trend?

Even though FIIs were buyers for three out of five sessions this week, yet the total divestment stood at ₹6,240.55 crore, while DIIs were buyers for all five sessions, with a total investment of ₹8,731.6 crore, according to stock exchange data. On a monthly basis, FIIs have sold shares in Indian markets to the tune of Rs. 14,171 crore between February 1-16, 2024.

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As per the NSE data, FIIs cumulatively bought ₹13,802.04 crore of Indian equities, while they sold ₹12,165.87 crore — resulting in an inflow of ₹253.28 crore on Friday, February 16. Meanwhile, DIIs invested ₹12,165.87 crore and offloaded ₹10,594.87 crore, registering an inflow of ₹1,571.00 crore.

“The market has been range bound in recent days due to bouts of selling and buying. During the last two days, FIIs sold equity worth ₹6,993 crore in the cash market while DIIs bought equity worth ₹5173 crore,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

What’s driving FIIs to sell in Indian markets?

‘’The trend of FII selling is likely to continue since the 10-year US bond yield is high at 4.24 per cent. The trend of DII buying too is likely to continue since the flows into the DIIs continue to be robust,” added Dr. V K Vijayakumar.

The global market construct continues to be favourable with the mother market US remaining resilient with S&P 500 at record highs. Pockets of overvaluation in the broader market continue to be a worry. Banking stocks are fairly valued. RIL is strong, according to the analyst.

US Treasury yields jumped and the US dollar edged up while global stock indexes were mixed to near flat on Friday after data showed US producer prices increased more than expected in January. This added to the view that any interest rate cuts by the US Federal Reserve are not likely to happen soon.

Also Read: Indian economy a ‘bright spot’ while Japan, UK fall into technical recession: What this means for the global market?

The yield on benchmark US 10-year notes rose 5.3 basis points to 4.293 per cent, from 4.24 per cent late on Thursday. The greenback also gained after the data. The dollar was last up 0.17 per cent compared to the yen at 150.16. The dollar index gained 0.06 per cent at 104.32, with the euro up 0.01 per cent at 1.0772.

Stock Market Today

The domestic market ended with gains for the week ended Friday, February 16, as investors shift their focus to fundamentals and macroeconomic indicators while hopes persist that the US Fed will start cutting rates from June this year.

The anticipation of rate cuts has been a significant driver for the market for the last few months. While US inflation remains above the Fed’s two per cent target, the economy is showing signs of some cooling, according to the latest data.

On Friday, equity benchmarks the Sensex and the Nifty closed with decent gains amid positive global cues. Nifty 50 closed at 22,040.70, up 130 points, or 0.59 per cent while the Sensex closed with a gain of 376 points, or 0.52 per cent, at 72,426.64. With this, the market benchmarks extended their gains into the fourth consecutive session.

The Nifty 50 and the Sensex closed over a per cent higher this week while the BSE Midcap index closed almost a per cent higher. The BSE Smallcap index underperformed and closed flat for this week.

“Stock markets remained optimistic for the 4th straight session as Nifty once again reclaimed the crucial 22,000 mark helped by buying in banking, IT, auto and realty shares. While positive global cues boosted investors’ sentiment, the recent weakness has allowed investors to take exposure to beaten-down stocks,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Technical View:

There would be bouts of intra-day volatility going ahead, while investors would be closely watching the US Fed’s move on interest rates going ahead, according to Mehta Equities’ Tapse.

‘’We suggest maintaining a positive yet cautious stance as Nifty is set to retest its record high. Needless to say, we need sustainability above 22,150 to end the consolidation and march towards the 22,500+ zone else profit taking may resume. Traders should keep a close watch on the banking index for cues while others may continue to play a supportive role on a rotational basis,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 16 Feb 2024, 10:03 PM IST