BackAfter 4 days of buying, FIIs turn net sellers over Fed's hawkish tone; DIIs show muted demand
As per NSE data, foreign institutional investors (FIIs) buying value stood at ₹7,570.52 crore in Indian equities on Thursday --- while the selling value came in at ₹8,132.30 crore. Taking this into consideration, FIIs outflow was overall at ₹561.78 crore during the day.
PremiumUS Federal Reserve's chair Jerome Powell hinted for higher than expected rate hikes ahead which sent panic among investors on Thursday. Indian equities dived tracking feeble global cues. In regards to institutional investors, FIIs took a U-turn to become net sellers after being buyers for the past four days in a row. While DIIs showed dull lacklustre demand for domestic equities.
As per NSE data, foreign institutional investors (FIIs) buying value stood at ₹7,570.52 crore in Indian equities on Thursday --- while the selling value came in at ₹8,132.30 crore. Taking this into consideration, FIIs outflow was overall at ₹561.78 crore during the day.
Meanwhile, domestic institutional investors (DIIs) bought ₹4,606.70 crore while selling ₹4,564.29 crore -- resulting in an inflow of merely ₹42.41 crore which would be the lowest buying of the year 2023 as of now.
At home, Sensex erased its psychological mark of 60,000, while the Nifty 50 tumbled below the 17,600 level. Auto, banking, and consumer durables stocks were the worst hit. Also, the steep selloff in heavyweight Reliance Industries weighed on the performance.
That being said, Sensex closed at 59,806.28 lower by 541.81 points or 0.90%. While Nifty 50 tumbled by 164.80 points or 0.93% to end at 17,589.60. India's volatility index rose by 2.2%.
Due to the latest selloff, over ₹1.93 lakh crore wealth was eroded on BSE as the overall listed companies' market cap stood at nearly ₹264.31 lakh crore on Thursday compared to the previous day's reading of over ₹266.24 lakh crore.
On the previous day, FIIs bought ₹3,671.56 crore, while DIIs sold ₹937.80 crore.
FIIs were net buyers between March 2nd to 8th, driven by a mega block deal in Adani Group-backed companies which led to the strong inflow of money in these stocks. Also, overall broader markets were bullish. During these days, FIIs inflow stood at a whopping ₹17,409.98 crore.
However, during his first day of testimony to lawmakers, Fed's Powell stated that policymakers are ready to increase key rates higher than previously expected on the backdrop of stronger than expected latest economic data. He said that faster tightening of monetary policy is warranted and that they are prepared to also increase the pace of rate hikes.
This set off the mood of Wall Street and that led to selling pressure on the global market. Indian equities too faced the brunt.
Rohan Patil, Technical Analyst, SAMCO Securities said, "As soon as the market opened on Thursday, bears were having an upper hand on the weekly expiry day, where the prices continued to drift lower and trade in a lower-high-lower-low formation. On the daily chart, Nifty has formed a bearish engulfing candle stick pattern and the index closed at 17,589 with a fall of 0.93%."
Patil added, "prices on the daily chart have engulfed their previous two days' candle and the index closed below 9 & 21 EMA respectively. The momentum oscillator RSI (14) has again found resistance near 50 levels and hooked down from there."
For ahead, Patil said, "the overall trend still remains in a bearish to sideways mode. The support for the Nifty is placed at around 17,400 – 17,350 levels and resistance are capped at 17,800 levels. In case the Nifty breach below 17,350 levels than 17,200 will be the next support zone. A strong break above 17,800 will indicates a breakout in index."
At the interbank forex market, the rupee gained against the US dollar which is most likely due to RBI's intervention. The local unit closed at 81.9750 per dollar compared to its previous day's print of 82.055.
On the currency, Anindya Banerjee, VP - Currency Derivatives & Interest Rate Derivatives at Kotak Securities said, "over the near term, the trigger will be the US jobs report tomorrow evening. If the actual print is stronger than expected, USDINR can rally towards 82.40 levels on spot."
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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