Foreign institutional investors (FIIs) extended their selling Friday, November 3, even as domestic markets rose for the second consecutive session amid positive signals. The domestic institutional investors (DIIs) infused ₹403 crore in Indian stocks today.
According to the NSE data, FIIs have bought cumulatively ₹7,739.00 crore of Indian stocks, while they were sold ₹7,751.43 crore — resulting in an outflow of ₹12 crore on Friday. Meanwhile, DIIs infused ₹7,932.73 crore and downloaded ₹7,530.04 crores, recording an inflow of ₹402.69 crores.
FIIs have sold Indian stocks since October on record high US bond yields, strength of the dollar index and the geopolitical risks due to the Israel-Hamas war. These combined factors subsequently weighed on market sentiment.
The US Federal Reserve’s decision to keep rates on hold and refrain from making accommodative indications encouraged the bulls to make a strong comeback in the mother market of the United States with the S&P rising 1.9 percent yesterday, according to market analysts.
Experts project short FII coverage in the near term as they turn buyers to positive global cues. With Brent crude crashing to the $85 per barrel and expectations of a pause in rates from the Fed, foreign investors may start buying Indian equities soon, analysts said. This could lead to short covering, which may push markets higher despite the uncertainty surrounding the Israel-Hamas conflict.
”Good earnings numbers and expectations that the interest rate will remain stable for now and decrease in H2 of CY2024 facilitated a market recovery. The positive global sentiments may encourage the bulls in India to stage a comeback. As FIIs are short in the market, short hedging is a possibility,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Stock Market
Domestic market benchmarks Nifty 50 and Sensex ended higher for the second straight session on Friday amid broadly positive global cues as investors’ risk appetite improved on hopes that an end to monetary policy tightening is near.
Nifty 50 today closed at 19,230.60, up 97 points, or 0.51 percent. The Sensex finally closed at 64,363.78, up 283 points, or 0.44 percent. The world’s major central banks, including the US Federal Reserve, the Bank of England and the European Central Bank, left rates unchanged this month, fueling hopes that interest rates have peaked.
“Floats in Asian stocks boosted gains in local stocks as lower US Treasuries and softening crude oil prices boosted sentiment, despite weakness in the Gift Nifty index. Markets pared some of its early gains as investors resorted to selective buying amid uncertainty on higher inflation levels, simmering West Asian conflict and its impact on the global economy,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.