As per the NSE data, FIIs cumulatively bought ₹9,850 crore of Indian equities, while they sold ₹10,074.71 crore — resulting in an outflow of ₹224.22 crore. Meanwhile, DIIs infused ₹8,324.05 crore and offloaded ₹7,173.90 crore, registering an inflow of ₹1,150.15 crore.
In September so far, FIIs have sold in the cash market for ₹8,608 crore and DIIs have bought for ₹5,715 crore. Sustained DII investment supported by strong retail buying is driving the market higher in spite of FII selling, according to analysts.
On Friday, domestic equity benchmarks Sensex and Nifty settled higher for the sixth consecutive session, despite a cautious global market. The benchmarks recorded their second straight week of gains and posted their best week since two month, gaining nearly 2 per cent, each.
Sensex closed 333 points, or 0.50 per cent, higher at 66,598.91 while the Nifty closed the day at 19,819.95, up 93 points, or 0.47 per cent. In the last six sessions of gains, Sensex has risen 2.73 per cent while Nifty has risen 2.94 per cent.
The BSE Midcap index closed with a strong gain of 0.92 per cent at 32,672 after hitting its fresh record high of 32,692.74 during the session. The BSE Smallcap index also hit its fresh record high of 38,369.21 during the session but ended at 38,266.53, up 0.43 per cent.
Nifty on track to hit record high levels of over 19,900
In spite of the net institutional selling by foreign investors, Nifty is up by 434 points for the month so far. This, along with the hyper activity in the mid-and small-cap segments, point to the active participation of retail investors in the rally, noted analysts.
Small- and mid-cap stocks extended their record run and yet again outperformed the benchmark indexes, rising 0.6 per cent and 1 per cent, respectively. The current market sentiments of sustained buying by DIIs and the strength in broader indices will drive Nifty to record high levels of over 19,900-20,000, as per market observers.
‘’The ‘buy on dips’ strategy is working well for traders. This market construct has the potential to take the rally to near the Nifty record high of 19,991. Frontline banking and IT stocks assisted by L&T and RIL have the potential to sustain the rally in the near-term. Bubble building up in segments of small-caps is an area of concern,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services also highlighted that the Nifty has been gaining strength and is inching closer towards its life high of 19,992. ‘’With monsoon gradually improving and India set to host G20 summit over the weekend, sentiments are buoyant and may lift market towards its life high and 20k mark over the next few days,” said Khemka.
What’s triggering FII selling?
Analysts noted that the ongoing rally in domestic markets could face hurdles as rising US dollar, fresh spike in US treasury yields and persisting FII selling may dampen the sentiment of investors.
‘’The FII selling has been triggered by the rising US bond yields and the strengthening dollar. With the yield from the US 10-year at 4.29 per cent and 2-year at 5 per cent, the FIIs are likely to sell further impacting market sentiments,” said Geojit’s Dr. V K Vijayakumar.
On the other hand, DIIs have been consistent buyers on the back of good flows to domestic mutual funds. ‘’The sustained performance by DIIs has played a crucial role in preventing the rupee from falling below the 83.25 level during recent corrections,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Where is Nifty headed
Rupak De, Senior Technical analyst at LKP Securities observed that the overall trend remained robust as the index consistently stayed above a critical moving average.
‘’However, a significant hurdle for the Nifty came in the form of substantial Call writing at the 19,900 strike price. Looking ahead, only a decisive move above the 19,900 level has the potential to propel the index towards the 20,200 mark. On the flip side, there was substantial Put writing at the 19,700 level, providing strong support for the Nifty,” said De.
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Updated: 08 Sep 2023, 09:51 PM IST