FIIs remain in selling mode offloading ₹711 cr, DIIs infuse ₹537 cr mitigating downside risk; check details
3 min read 08 Aug 2023, 07:17 PM ISTAs per the NSE data, FIIs cumulatively bought ₹10,721.75 crore of Indian equities, while they sold ₹11,433.09 crore --- resulting in an outflow of ₹711 crore.
PremiumForeign institutional investors (FIIs) continued their selling streak as Indian markets settled lower on August 8 against weak global cues. The domestic institutional investors (DIIs) turned net buyers and invested ₹537 crore during Tuesday's session.
As per the NSE data, FIIs cumulatively bought ₹10,721.75 crore of Indian equities, while they sold ₹11,433.09 crore --- resulting in an outflow of ₹711 crore. Meanwhile, DIIs infused ₹8,809.11 crore and offloaded ₹8,271.80 crore, registering an overall inflow of ₹537.31 crore.
FIIs have been net sellers of domestic equities for several days in a row, while too DIIs showed a renewed interest in buying Indian stocks for the past few sessions.
‘’On the global front, investors are adopting a cautious approach even amidst declining bond yields as they await the release of crucial economic data. The significant drop in Chinese exports has also contributed to concerns within the global market. FIIs remain in a selling mode in the domestic market, yet active buying from DIIs is mitigating downside risks…Mid- and small-cap stocks have continued to outperform the benchmark, showcasing their resilience,'' said Vinod Nair, Head of Research at Geojit Financial Services.
Domestic market benchmarks Sensex and Nifty settled lower while the second-rung midcap and smallcap indices scored gains during today's session, amid weak global cues as China's weak economic data weighed on sentiment.
Sensex opened 95 points higher at 66,048.81 against the previous close of 65,953.48 but failed to hold altitude, falling about 201 points to hit the intraday low of 65,752.63. The index finally closed 107 points, or 0.16 per cent, lower at 65,846.50 while the Nifty ended 26 points, or 0.13 per cent, lower at 19,570.85, both snapping their two-day winning run.
Mid and smallcaps outperformed the benchmark Sensex. The BSE Midcap index ended with a gain of 0.15 per cent while the Smallcap index rose 0.25 per cent. Nifty PSU Bank index surged 3.37 per cent, followed by Nifty Media (up 0.74 per cent) and Nifty Pharma (up 0.64 per cent).
Securities and Exchange Board of India (SEBI) said in its Annual Report on August 7 that since the second quarter of 2022-23, foreign portfolio investors (FPI) flows to Indian markets started to turn positive with bouts of moderate selling. ‘’On a whole, FPIs pulled out ₹37,632 crore from Indian equities during 2022-23, a 73.1 percent decline in outflows as compared to 2021-22," said the capital markets regulator.
Adding on, the market regulator said that domestic institutional investors invested a net of ₹2.55 lakh crore in the Indian cash markets in 2022-23, as against net FPI outflows of ₹61,754 crore from the equity cash market through the stock exchange route. SEBI in the report cited strong domestic liquidity that continued to serve as a cushion for the Indian markets.
"Strong domestic liquidity continued to serve as a cushion for the Indian markets, with domestic institutional investors investing a net of ₹2.55 lakh crore in the Indian cash markets in 2022-23, as against net FPI outflows of ₹61,754 crore from equity cash market through the stock exchange route," said SEBI.
Where are markets headed?
‘’Nifty has encountered a notable resistance at the 20-day moving average (20-DMA) subsequent to rebounding from the 19,300 mark. If it fails to surpass this level, there's a possibility of a renewed wave of selling, potentially driving it towards the 18,888 level. Within this decline, the support levels at 19,300 and 19,191 are likely to serve as intermediate barriers,'' said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
On the contrary, sustaining its position above the 20-DMA, which is currently at 19,640, could set the stage for a short-covering rally, possibly propelling Nifty towards the range of 19,800 to 20,000.
‘’In the near term, the Reserve Bank of India's policy decision holds significant importance, shaping market sentiment. Additionally, the flow of FIIs remains a pivotal factor, given their recent trend of selling over the past few days,'' added Gour.
