Foreign Institutional Investors (FIIs) have continued their trend of selling on the stock market despite a positive turn in the market on Monday, August 21. While domestic institutional investors (DIIs) showed a contrasting trend by being net buyers during the session, the lingering concerns of rising US bond yields and a stronger dollar are expected to keep foreign fund inflows subdued in the near future.
FIIs and DIIs Activity
According to data from the National Stock Exchange (NSE), FIIs collectively purchased Indian equities worth ₹8,074.95 crore. However, they also sold stocks amounting to ₹9,976.05 crore, resulting in a net outflow of ₹1,901.10 crore. In contrast, DIIs invested ₹6,157.40 crore and divested ₹5,531.15 crore, leading to a net inflow of ₹626.25 crore.
August Trends
Throughout August, foreign portfolio investors (FPIs) have been selling stocks, amounting to ₹10,921 crore. Their activity has shown a net selling trend on 10 days and net buying on only three days. Despite this, the market has seen a balancing act due to strong buying by DIIs. However, the DIIs’ buying activity has not been sufficient to prevent the market’s decline.
Market Performance
On the session in question, the Sensex index closed with a gain of 267 points, equivalent to 0.41%, reaching 65,216.09. Meanwhile, the Nifty50 index experienced a rise of 83 points, or 0.43%, settling at 19,393.60. Notably, mid and small-cap stocks outperformed the benchmark indices. The BSE Midcap index and Smallcap index both closed higher by 0.87% and 0.71%, respectively.
Outlook and Analysis
The continuous selling trend by FIIs indicates the cautious sentiment prevalent in the market. While positive global cues and DII activity have provided some support, the uncertainty stemming from factors such as rising US bond yields and the dollar’s strength have created headwinds for foreign fund inflows. Market analysts expect the trend to persist in the near term until these concerns subside or are addressed.
Conclusion
The ongoing selling streak by Foreign Institutional Investors highlights the impact of global economic factors on the Indian stock market. As the market navigates challenges posed by rising US bond yields and currency fluctuations, the balancing act between FIIs and DIIs becomes a crucial factor in determining the market’s trajectory. The market’s resilience, coupled with DIIs’ buying activity, serves as a reminder of the complex interplay of domestic and global forces in shaping India’s financial landscape.
Disclaimer: The information provided here is for informational purposes only and should not be construed as investment advice. Always consult with financial professionals before making investment decisions.