Foreign Institutional Investors (FIIs) have once again shown confidence in the Indian stock market, making a significant return after several weeks of continuous selling. Between October 6 and October 10, FIIs collectively infused a net ₹1,751 crore into Indian equities, indicating a renewed positive outlook towards the nation's economic prospects.
Shift from Selling to Buying
According to data from the National Securities Depositary Limited (NSDL), FIIs initially engaged in heavy selling during the first two days of the week, divesting ₹1,584. 48 crore on October 6 and ₹1,471. 74 crore on October 7. However, this trend sharply reversed in the subsequent three days, with aggressive buying. They invested ₹1,663. 65 crore on October 8, ₹737. 82 crore on October 9, and a substantial ₹2,406. 54 crore on October 10. This resulted in a net inflow of ₹1,751, while 79 crore for the entire week.
DIIs Provided Market Support
Throughout the period of sustained FII outflows over the past few months, Domestic Institutional Investors (DIIs) played a crucial role in stabilizing the market. Their consistent buying helped counterbalance the foreign selling, preventing significant downturns and maintaining overall market resilience.
Changing Sentiments and Future Outlook
Ajit Mishra, Senior Vice President (Research) at Religare Broking, highlighted the significance of this shift. He stated that this change in FIIs' trading behavior underscores their evolving perception of Indian equities, driven by global stability and domestic strength, while mishra added that a sustained inflow from foreign investors, coupled with continued global risk appetite and improving corporate earnings, would further strengthen the market's trajectory.
Decline in Overall Outflows
Following this positive investment week, the net outflow by Foreign Portfolio Investors (FPIs) for October has reduced to ₹2,091 crore. This is a notable improvement compared to September, which saw a hefty net outflow of ₹23,885 crore. While the year-to-date FII net outflow still stands at ₹1,56,611 crore, the recent buying activity suggests a rekindled trust in Indian markets. The durability of this positive trend, however, will hinge on future investment flows, solid corporate earnings, and evolving global conditions.
