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Business News/ Markets / Stock Markets/  FIIs offload 693 crore in Indian equities as US bond yields climb to 10 year-high, DIIs invest 715 crore
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FIIs offload ₹693 crore in Indian equities as US bond yields climb to 10 year-high, DIIs invest ₹715 crore

The US Treasury yields hit a multi-year high and the US dollar rose to a 10-month high level amid concerns over interest rates staying high for an extended period and its impact on the global economy.

FIIs offloaded ₹693 crore in Indian equities today. Photo: ReutersPremium
FIIs offloaded 693 crore in Indian equities today. Photo: Reuters

Foreign institutional investors (FIIs) continued their selling streak as Sensex and Nifty closed lacklustre on Tuesday, September 26, tracking weak global cues. The domestic institutional investors (DIIs) turned net buyers and invested 715 crore in Indian stocks today.

As per the NSE data, FIIs cumulatively bought 8,750.81 crore of Indian equities, while they sold 9,444.28 crore --- resulting in an outflow of 693.47 crore on Tuesday. Meanwhile, DIIs infused 7,502.47 crore and offloaded 6,787.72 crore, registering an inflow of 714.75 crore.

The US Treasury yields hit a multi-year high and the US dollar rose to a 10-month high level 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. In September so far, FIIs have sold 20,593 crore in Indian markets, while DIIs have invested 14,748 crore.

Market analysts expect FII's to continue selling in Indian markets as long as US bond yields are on an uptrend. Profit-booking in markets can continue over FII activity. Meanwhile, DIIs buying interest offsets the risk to a certain extent.

‘’The US 10-year bond yield climbing to a 10-month high of 4.54 per cent and the dollar index spiking to 105.94 are headwinds for the market. This is getting reflected in the sustained FII selling which has taken the net FII sell figure in September, so far, to 20,593 crore,' said said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The buying by DIIs, at 13,748 crore, is supporting the market but is not strong enough to give confidence to the bulls. It remains to be seen how this tug of war plays out in the near-term,'' added Dr. V K Vijayakumar.

The US Federal Reserve, in its latest policy decision, held its overnight benchmark interest rate to 5.25 per cent - 5.50 per cent, however, it signalled that another rate hike is possible before the end of the year.

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"The Fed’s hawkish pause message has created a global risk-averse sentiment in global equity markets. The spike in the dollar index to 105.52 and the US 10-year bond yield shooting up to a 16-year high of 4.5 per cent are negative for equity markets, particularly emerging markets,'' said Dr. V K Vijayakumar.

Stock Markets Today

Domestic equity benchmarks Sensex and Nifty settled lower on Tuesday due to select profit taking in IT and banking shares in line with weak Asian markets and continuous foreign fund outflows.

Nifty 50 opened at 19,682.80 against the previous close of 19,674.55 and touched the intraday high and low of 19,699.35 and 19,637.45 respectively. Nifty 50 finally closed at 19,664.70, down 10 points, or 0.05 per cent. The Sensex closed 78 points, or 0.12 per cent, lower at 65,945.47.

The BSE Midcap index also ended in the red, falling 0.09 per cent but the BSE Smallcap index managed to clock a gain of 0.33 per cent. IT stocks remained weak, falling 0.5 per cent on worries over demand uncertainties due to a higher interest rate environment in the US, a key market for Indian IT companies.

Meanwhile, long-term investors can utilise the weakness in the market as an opportunity to buy high quality stocks in financials, capital goods and autos ignoring the near-term volatility in the market, according to analysts.

Where is Nifty headed?

Rupak De, Senior Technical Analyst at LKP Securities observes that Nifty remained largely range-bound throughout the day as traders appeared uncertain. However, the short-term sentiment remains bearish as Nifty closed below the 21EMA.

‘’Looking ahead, the trend is expected to stay bearish as long as Nifty remains below the 19750 level. A support level is established at 19600, below which the index may decline further towards 19250,'' said De.

 

 

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 26 Sep 2023, 07:35 PM IST
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