FIIs make a stellar comeback! ₹13,474 crore invested in Indian equities
The return of FIIs was one of factors which drove the benchmark Nifty 50 to hit its fresh record high of 20,291.55 in the intraday session on Friday, December 1 on all-round buying. The domestic institutional investors (DIIs) also infused in Indian stocks, however, FIIs have now won the tug of war with sustained buying in the last six sessions.
As per the NSE data, FIIs cumulatively bought ₹10,522.36 crore of Indian equities, while they sold ₹8,932.75 crore — resulting in an inflow of ₹1,589.61 crore on Friday. Meanwhile, DIIs invested ₹11,173.05 crore and offloaded ₹9,724.97 crore, registering an inflow of ₹1,448.08 crore.
‘’Indian equities gained for the fifth consecutive week driven by strong economic data, healthy corporate earnings and cheerful festive season. Return of FIIs, multiple upgrades of India’s economic growth by global firms, added to the overall positivity,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Analysts expected FIIs to turn buyers soon; here’s why
Analysts had said last month that the Indian market continues to exhibit resilience even in the midst of several challenges and there is a growing concern among foreign investors that if they continue to sell, they will miss out on the potential rally in the Indian market. This might restrain the FIIs from selling heavily in the coming days.
‘’FIIs are likely to turn buyers, lest they miss out on the rally in the best performing large economy in the world. Leading financials which were weighed down by FII selling will bounce back,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services in November.
What’s driving the rally in Indian markets?
Firstly, the Indian economy grew 7.6 per cent during the July-September quarter for fiscal 2023-24 (Q2FY24), remaining the fastest-growing major economy in the world, according to the gross domestic product (GDP) data released by the statistics ministry.
The Q2 GDP growth – supported by government spending and strong performance in manufacturing, mining, and construction sectors – was sharply above D-Street estimates as well as projections by the Reserve Bank of India (RBI). The GDP print compelled various global rating agencies to upgrade their FY24 GDP growth estimates for India. This may have added to the growing interest among FIIs, who have been eyeing Indian equities again.
Secondly, exit polls of the five state elections have indicated political stability ahead of the General Elections 2024. This appears to have calmed the market. “A decisive BJP win will reinforce the consensus view that the party is on the front foot for the 2024 general elections. This will likely add a further leg of the rally to the markets as policy continuity will be viewed as a positive growth shock in the medium term,” said analysts at brokerage firm Emkay Global Securities.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said, “Frenzied buying on the back of renewed optimism from the FIIs and positive European market cues lifted benchmark Nifty to a fresh record high. India remains a bright spot in an uncertain global economy as the recent data indicators such as strong GDP and manufacturing numbers along with external factors like falling US bond yields are keeping markets in good stead.”
Stock Market Today
Nifty 50 logged its best week in five months as strong macroeconomic data added to optimism over the global interest rate outlook. Sensex jumped 493 points to close at an 11-week high, while Nifty 50 hit its all-time high.
Nifty 50 closed 135 points, or 0.67 per cent, higher at 20,267.90. The 30-share BSE Sensex jumped 492.75 points or 0.74 per cent to settle at 67,481.19, the highest closing level since September 18. The blue-chips Nifty 50 and BSE Sensex gained 2.39 per cent and 2.29 per cent, respectively, led by a rise in energy stocks.
Technical View
‘’The good news is that the short-term technical outlook for Nifty continues to be in favor of the bulls, with support seen at 20089-19909 and resistance at 20500-20751,” said Tapse of Mehta Equities.
‘’The rotational buying across the key sectors is helping the index to inch higher and we are now eyeing 20,500 in Nifty ahead. Apart from the domestic factors, upbeat global cues, especially the performance of the US markets, are further adding to the positivity. We thus recommend continuing with a “buy on dips” approach with a focus on stock selection,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.
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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Updated: 01 Dec 2023, 09:16 PM IST
