FIIs Continue to Sell as DIIs Drive Indian Markets with Record Inflows

FIIs Continue to Sell as DIIs Drive Indian Markets with Record Inflows.

pic credit: PTI

Indian Markets Defy Pessimism

Despite lingering pessimism from the previous session, Indian domestic markets showed resilience on Wednesday, September 13, as they witnessed increased buying activity, propelled by positive macroeconomic data. Foreign institutional investors (FIIs), however, continued to offload their holdings, while domestic institutional investors (DIIs) played a pivotal role in sustaining the market’s upward momentum.

DIIs: The Pillars of Support

DIIs emerged as the pillars of support for the Indian stock market by investing a substantial ₹850 crore in Indian stocks on this trading day. Their consistent investment, combined with strong retail buying, has kept the market buoyant in the face of FII selling.

FII Selling vs. Nifty’s Record Highs

According to NSE data, FIIs collectively sold Indian equities worth ₹12,006.88 crore while purchasing ₹10,375.25 crore, resulting in an outflow of ₹1,631.63 crore. In contrast, DIIs injected ₹8,104.69 crore into the market and offloaded ₹7,254.83 crore, resulting in a net inflow of ₹849.86 crore. The sustained DII investment, fueled by robust retail participation, has not only offset FII selling but also propelled Nifty to achieve record lifelong highs this month.

Retail Investor Activity and Market Rally

The active involvement of retail investors, especially in mid-and small-cap segments, has been a driving force behind the market’s remarkable performance. Despite net institutional selling by foreign investors, domestic markets closed higher on Wednesday. Nifty, in particular, achieved a historic closing high, breaching the 20,000 mark for the first time. Sensex, too, displayed strength by settling at 67,466.99, marking its ninth consecutive winning session, the longest streak in the last five months.

Macroeconomic Data and Market Sentiment

The positive sentiment in the market was buoyed by favorable macroeconomic data. Banking, energy, and telecom sectors saw increased buying activity, reflecting the confidence of investors in India’s economic prospects. India’s retail inflation rate declined to 6.83 percent in August, down from a 15-month high of 7.44 percent in July, primarily due to softer vegetable prices, although it remains slightly above the Reserve Bank of India’s comfort zone.

Analyst Outlook

Rupak De, Senior Technical Analyst at LKP Securities, provided insights into the market’s future direction, stating, “Bulls successfully regained control from bears, pushing Nifty back above the 20,000 mark. Notably, it closed above this threshold, marking a historic closing high for Nifty. The prevailing sentiment remains optimistic, contingent on put writers safeguarding the 19,900 level. A drop below 19,900 could unsettle put writers, potentially triggering market corrections. On the upside, the 20,100-20,150 range is poised to act as resistance. A clear breakthrough above 20,150 might propel Nifty into a sustained upward trend.”