The Foreign Institutional Investors (FIIs), on Monday, continued to maintain its selling streak after the market ended on a lower note amid weak global cues.
As per NSE data, published on November 20, FIIs cumulatively sold ₹9,421 crore and purchased over ₹8,776 crore, resulting in an outflow of ₹645 crore on Monday. Meanwhile, Domestic Institutional Investors (DIIs) invested ₹ 6,646 crore and offloaded ₹6,369 crore, registering an inflow of ₹77 crore.
Meanwhile, on Friday, FIIs cumulatively sold Indian equities ₹12,035.41 crore and purchased over ₹11,557. Whereas, DIIs invested ₹ 6,849 crore and sold ₹7,414 crore
FII have been divesting Indian equities since October, driven by historically high US bond yields, the strengthening dollar index, and geopolitical uncertainties stemming from the Israel-Hamas conflict. These combined factors have exerted downward pressure on market sentiment.
Despite ongoing concerns about elevated interest rates and a global economic slowdown, foreign inflows have remained subdued. However, the outflow in November has notably eased due to lower US bond yields and a decline in crude oil prices.
Analysts believe that despite facing numerous challenges, the Indian market demonstrates ongoing resilience. Foreign investors are increasingly worried that persistent selling could cause them to overlook a potential upswing in the Indian market. This concern may act as a deterrent, limiting significant sell-offs by Foreign Institutional Investors (FIIs) in the upcoming days.
“Elevated long-term interest rate trends and a weakening global economy continue to hurt inflows and market movement. While the recent softening of inflation in the US & India and the negative trend of crude are expected to help the view on global equity and India in the short term. In that context, the ease in FIIs selling is helping the domestic markets but continues to consolidate primarily due to India’s premium valuation relative to global peers. In this scenario, the IT sector is benefiting; however, valuation continues to be on the higher side compared to long-term history, suggesting a cautious approach in the sector in the medium term,” said Vinod Nair, Head of Research at Geojit Financial Services.
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Updated: 20 Nov 2023, 06:57 PM IST