BackFIIs offload ₹3,364 crore in Indian equities as US bond yields rise to 16 year-high; DIIs are net buyers
As per the NSE data, FIIs cumulatively bought ₹10,711.39 crore of Indian equities, while they sold ₹14,075.61 crore --- resulting in an outflow of ₹3,364.22 crore on Thursday
PremiumForeign institutional investors (FIIs) continued their selling streak as Sensex and Nifty closed at four-week low on Thursday, September 28, dragged by F&O expiry and weak global cues. The domestic institutional investors (DIIs) are net buyers again and invested ₹2,711.48 crore in Indian stocks today.
As per the NSE data, FIIs cumulatively bought ₹10,711.39 crore of Indian equities, while they sold ₹14,075.61 crore --- resulting in an outflow of ₹3,364.22 crore on Thursday. Meanwhile, DIIs infused ₹15,118.41 crore and offloaded ₹12,406.93 crore, registering an inflow of ₹2,711.48 crore.
FIIs have sold ₹21,640 crore in cash markets so far this month, according to analysts. The US Treasury yields hit a 16-year high mark and crude oil prices almost touched $98 per barrel amid concerns over interest rates staying high for an extended period and its impact on the global economy. This has largely supported the FII selling streak since August.
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"Even though the market is showing resilience, the undercurrent is weak. The dollar index at 106.59, the US 10-year bond yield at 4.62 per cent and Brent crude above $97 are strong headwinds that can pull the market down. FIIs who have sold for ₹21,640 in the cash market in September, so far, are likely to sell more,'' said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Stock Market Today
Analysts reckon that persistent selling by foreign investors and global cues such as rising US bond yields and crude oil prices presents a bleak picture for markets in the near-term. The benchmark Nifty 50 has retreated from its record-high level achieved earlier this month on unfavorable global triggers.
Domestic equity benchmarks Sensex and Nifty gave up initial gains and settled lower by one per cent on Thursday, tracking volatility on the monthly F&O expiry and dragged by weak global cues. A massive sell-off in information technology (IT) stocks and select heavyweights including Reliance Industries, ITC, and Infosys also dented market sentiments.
The frontline indices however, had opened in a positive territory driven by strength in metals and bank stocks. But global cues such as high crude oil prices and rising US bond yields limited further gains.
These indicators have been weighing on the global equity markets since the US Federal Reserve struck a hawkish tone earlier in the month. The Nifty 50 closed at 19,523.55, down 192.90 points, or 0.98 per cent. The 30-share BSE Sensex closed lower at 517.54 points, or 0.78 per cent, at 65,601.15.
‘’Investors have to be cautious at this stage. Profit booking in the mid-and small-cap stocks which have shot up on hope and aggressive buying would be a good strategy. There is safety in large-caps, particularly in segments like banking/financials, capital goods and autos,'' added Dr. V K Vijayakumar.
Where are markets headed?
Analysts noted that the volatility index - India VIX, spiked sharply to 13 levels, last seen in May 2023 before settling at 12.8 levels. All the sectors entered in red with IT and FMCG being the biggest losers to the tune of almost 2 per cent on Thursday.
After the failed attempt to reclaim 19,750, Ajit Mishra, SVP - Technical Research, Religare Broking Ltd expects Nifty to inch further lower and test 19,400 however the major support is at 19,200. ‘'Participants should align their trades accordingly and focus more on risk management’', he adds.
‘’Going ahead, the weakness in the market is likely to extend till the worry over the elevated oil prices and higher interest rates remains, posing a risk to the earnings growth trajectory,'' said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
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