FIIs Continue Selling Trend Amid High US Bond Yields, While DIIs Show Investment Resilience

FIIs Continue Selling Trend Amid High US Bond Yields, While DIIs Show Investment Resilience

VoM News Desk | October 4, 2023 | 11:11 PM IST | Breaking News | Follow on Google News

FIIs Continue Selling Trend Amid High US Bond Yields, While DIIs Show Investment Resilience

FIIs Continue Selling Trend Amid High US Bond Yields, While DIIs Show Investment Resilience

Foreign institutional investors (FIIs) are expected to persist in their selling trend into October, primarily driven by rising US bond yields. This trend has resulted in the Sensex and Nifty 50, India’s leading stock indices, extending their losses for a second consecutive session. In contrast, domestic institutional investors (DIIs) have exhibited resilience, injecting 1,769.49 crore into Indian stocks.

Impact of Escalating US Bond Yields on FIIs

The continual increase in US bond yields has been a key catalyst for FIIs’ sustained selling activity. In the previous month, FIIs divested approximately 25,000 crore in cash markets, a trend that is anticipated to persist. The US Treasury yields recently touched a 16-year high, while crude oil prices nearly reached $98 per barrel last week. These factors, combined with concerns surrounding prolonged high-interest rates, have reverberated through the global economy and bolstered the FII selling streak since August.

DIIs Display Robust Investment Activity

In contrast to the selling propensity of FIIs, DIIs have remained steadfast in their investment endeavors. According to data from the NSE (National Stock Exchange), DIIs infused a total of 10,050.08 crore into the market while offloading 8,280.59 crore, culminating in a net inflow of 1,769.49 crore. This positive trend among domestic investors has stood strong even in the face of adverse global cues affecting the market.

Insights from Market Analysts

Market analysts have offered insights into the current market dynamics. They note that the valuation of certain segments in the Indian markets, especially in technology and new-age stocks, has become increasingly attractive. This situation may serve as an incentive for DIIs and retail investors to consider purchasing stocks in these segments. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, has opined that the persistent ascent of US bond yields is likely to perpetuate FII selling.

Meanwhile, sectors that are sensitive to interest rates, such as real estate, banking, and metals, have experienced notable impacts. Conversely, the FMCG (Fast-Moving Consumer Goods) sector is more optimistic due to expectations of a near-normal monsoon and heightened demand during festivals. The automotive sector is navigating a period of consolidation amid mixed growth figures, making large-cap stocks a more secure choice in the current climate.

Vinod Nair, Head of Research at Geojit Financial Services, has advised investors to monitor stocks that maintain strength even in a challenging market environment. Some stocks that exemplify this resilience include Bajaj Finance, L&T, and Zomato. For long-term investors, the present market conditions present opportunities, especially as fundamentally strong stocks like large-cap private sector banks have weakened due to FII selling.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.