As per the NSE data, FIIs cumulatively bought ₹7,166.98 crore of Indian equities, while they sold ₹8,879.31 crore — resulting in an outflow of ₹1,712.33 crore on Thursday. Meanwhile, DIIs invested ₹7,930.58 crore and offloaded ₹6,418.44 crore, registering an inflow of ₹1,512.14 crore.
FIIs have sold Indian equities since October on record-high US bond yields, strength of the dollar index, and the geopolitical risks due to the Israel-Hamas war. These combined factors have since weighed on market sentiment.
However, the US Federal Reserve’s decision to hold has emboldened the bulls to make a strong comeback in the mother market US with S&P rising 1.9 per cent yesterday, according to market analysts. Because of the US Fed’s dovish commentary, US 10-year bond yields and crude oil prices have come down.
Selling streak to reverse soon, FIIs may turn buyers: Analysts
Analysts reckon that the Indian market continues to exhibit resilience even in the midst of several challenges and there is a growing concern among foreign investors that if they continue to sell, they will miss out on the potential rally in the Indian market. This might restrain the FIIs from selling heavily in the coming days.
“The favourable market texture continues with declining bond yields in the US (10- year yield is at 4.48 per cent) and Brent crude dipping below $80. The resilience of the market is forcing the FIIs to substantially reduce their selling which dwindled to ₹85 crore yesterday,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
‘’The FOMO ( Fear of Missing Out) factor is likely to restrain the FIIs from aggressive selling. This will be favourable for the financial sector which has been bearing the brunt of FII selling,” added Dr. V K Vijayakumar.
Experts also project short covering by FIIs in the near-term as they turn buyers over positive global cues. With Brent crude crashing to below $80 per barrel-mark and the pause in rate hike by the Fed, foreign investors may start buying Indian equities soon, said analysts. This could lead to short covering which can take markets higher despite the uncertainty surrounding the Israel-Hamas conflict.
Stock Markets Today
Domestic equity benchmarks Nifty 50 and Sensex settled lower on Thursday, November 9, as the rally in financial and IT stocks since the US Federal Reserve’s rate pause cooled down.
The NSE Nifty 50 index lost 0.25 per cent to close at 19,395.30, while the S&P BSE Sensex settled 0.22 per cent lower at 64,832.20. In the broader market, the BSE smallcap gauge declined 0.27 per cent while the midcap index gained 0.06 per cent.
Commenting on today’s market performance, Vinod Nair, Head of Research at Geojit Financial Services said, “Reflecting the mixed global sentiments, the Indian market is mired to a range bound trend with the Nifty index not able to breach above the key level of 19,500.”
Cues from the Fed Chair’s speech have reduced the likelihood of a rate hike in the near term, leading to an ease in US treasury yields and calming the market.
‘’FIIs selling has moderated but inflows continue to be muted on concerns of an elevated interest rate and a global slowdown. Mid- and small caps are back in favour after the recent fall, led by retail activities & good corporate results,” he added.
Where are markets headed?
Nifty after the upmove last week, is in consolidation mode. It has been unable to cross the 19450-19500 levels for last 4 trading sessions. ‘’Overall we expect the ongoing recovery to continue and any dips can be used as buying opportunity,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
The recent pause is the index is largely in sync with the global markets, especially the US, and needs a decisive break from the 19,200-19,500 zone for the next move. Meanwhile, stay focused on identifying the sectors and themes that are performing well and utilize intermediate dips to add quality stocks, according to Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 09 Nov 2023, 09:09 PM IST