FIIs invest over ₹3,085.5 crore in Indian stocks after Fed pauses rates; DIIs selling slows to ₹298 crore
Despite Sensex and Nifty 50 trading in the red due to hawkish US Fed commentary, foreign institutional investors made a strong buying of over ₹3,085 crore on Thursday. Domestic institutional investors sold nearly ₹298 crore.
While Sensex and Nifty 50 traded in red due to hawkish commentary by US Fed, however, foreign institutional investors (FIIs) were unbothered by the bearish trend and instead made a strong buying of more than ₹3,085 crore on Thursday. On the other hand, domestic institutional investors (DIIs) further sold nearly ₹298 crore.
As per NSE data, cumulatively, FIIs buying value stood at ₹12,641.91 crore, and they sold ₹9,556.40 crore -- recording an inflow of ₹3,085.51 crore.
Meanwhile, DIIs purchased ₹6,798.75 crore worth of equities and offloaded ₹7,096.63 crore -- registering an outflow of ₹297.88 crore. Compared to the previous session, the selling has slowed from DIIs.
On June 15th trading session, Sensex erased its psychological point of 63,000 mark to end at 62,917.63, shedding 310.88 points or 0.49%. Nifty 50 dipped by 67.80 points or 0.36% to close at 18,688.10.
Talking about markets performance, Ajit Mishra, SVP - of Technical Research, at Religare Broking said, "Markets traded volatile on the weekly expiry day and shed nearly half a percent. After the flat start, Nifty tried to inch higher but pressure in banking and IT heavyweights pushed the index lower as the day progressed. Consequently, Nifty settled closer to the day’s low at 18688.10 levels. While the majority of the sectoral indices traded in tandem and ended lower, the defensive pack viz. FMCG and pharma managed to end in the green. And, the broader indices too maintained their outperformance and ended flat."
Also, Shrikant Chouhan, Head of Research (Retail), Kotak Securities said, "The correction came into play after 3-session gains and Sensex closed below the 63k-mark, as a hawkish comment by the US Federal Reserve indicating the possibility of two more rate hikes fueled pessimism in the markets."
Chouhan added, "After a rate hike pause, investors were expecting a more dovish stance but the Fed's comments on interest rates left the markets disappointed."
Staying on its plan to achieve maximum employment and inflation at the rate of 2%, FOMC on Wednesday decided to maintain the target range for the federal funds rate at 5 to 5-1/4 percent.
In the previous trading session (June 14), FIIs invested ₹1,714.72 crore in Indian stocks, while DIIs sold ₹654.77 crore.
For Friday's trade, Mishra said, "The banking index has finally breached the first line of defense i.e. 20 EMA, and that indicates further profit taking ahead. However, resilience in other sectors like auto, FMCG, realty, and energy may cap the damage. Besides, the performance of the global indices, especially the US markets, will also be in focus for cues. Amid all, we suggest keeping a check on positions amid mixed signals and waiting for clarity."
Further, Chouhan said, "Technically, a double top formation on intraday charts and a bearish candle on daily charts are indicating temporary weakness in the markets. As long as the Nifty is trading below 18765, the weak sentiment is likely to continue. Below the same, the index could slip till 18600-18550. However, a fresh uptrend could be seen only after the dismissal of 18765 and could move up to 18825-18875."
According to Ritika Chhabra- Quant Macro Strategist – Prabhudas Lilladher PMS, while the Fed's hawkish statement might create some volatility in the equity markets, overall we are constructive on Indian stock market. India continues to the bright spot in the EM space.
Chhabra added, "Our economic data continues to surprise on the upside. This is in contrast to the data coming in for China, that has been disappointing. From global perspective, India is in a sweet spot that will keep attractive foreign inflows."
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