FIIs Selling Slows Amidst Favorable Global Conditions

FIIs Selling Slows Amidst Favorable Global Conditions
FIIs Selling Slows Amidst Favorable Global Conditions
FIIs Selling Slows Amidst Favorable Global Conditions
FIIs Selling Slows Amidst Favorable Global Conditions

FIIs Selling Slows Amidst Favorable Global Conditions

FIIs Selling Slows Amidst Favorable Global Conditions

FIIs Selling Slows Amidst Favorable Global Conditions

FIIs continued their selling activity on Wednesday, October 11, but the extent of their selling has decreased. This decline in intensity is attributed to easing US bond yields and softer crude oil prices. Despite FII selling, Indian domestic equity benchmarks Sensex and Nifty saw positive gains, boosted by optimistic global cues in anticipation of the US Federal Reserve minutes-of-the-meeting. On the other hand, domestic institutional investors (DIIs) resumed their role as net buyers, investing ₹1,032 crore in Indian stocks.

As per NSE data, FIIs cumulatively purchased ₹12,526.94 crore of Indian equities and sold ₹12,948.71 crore, resulting in a net outflow of ₹421.77 crore on Wednesday. Meanwhile, DIIs infused ₹8,369.48 crore and offloaded ₹7,337.46 crore, registering a net inflow of ₹1,032.02 crore.

Market Resilience and Mixed Investment Patterns

Despite sustained FII selling, the fact that Nifty is just 2.5% away from its all-time high showcases the market’s strength and resilience. This market strength is attributed to buying activities by DIIs, High Net Worth Individuals (HNIs), and retail investors, which balance out the selling and support the market. Investors continue to seek safety in large-cap stocks.

Global Factors and Market Performance

On Wednesday, October 11, the domestic equity benchmarks Sensex and Nifty 50 recorded gains for the second consecutive session. This uptick was influenced by positive global cues, as bond yields eased ahead of the US Federal Reserve’s latest meeting minutes and US inflation figures. US bond yields cooled down from their highest levels since 2007 following signals from Fed officials indicating a potential end to rate hikes. The market is eagerly awaiting the release of minutes from the Fed’s September meeting. Additionally, India’s September CPI-based inflation data is expected on Thursday, with experts predicting a figure around 5.5% for September compared to 7.44% in July and 6.83% in August.

Nifty 50 closed at 19,811.35, up 122 points, or 0.62%, and the Sensex settled at 66,473.05, up 394 points, or 0.60% on Wednesday, just ahead of the announcement of India’s leading software services exporter Tata Consultancy Services (TCS) regarding its July-September quarter results.

Market Expectations and Outlook

Market breadth remained strong, with investors showing confidence that the Middle East tensions would not significantly impact crude oil prices. Amid dovish comments from the US Federal Reserve, the US 10-year bond yield traded lower. Furthermore, the September India CPI is expected to have cooled due to reduced food and fuel inflation. The start of the Q2 earnings season, beginning with the IT sector, is expected to have moderate expectations, while broader corporate results are expected to be strong.

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