FIIs offload ₹12 crore in Indian stocks; analysts see near-term short-covering

As per the NSE data, FIIs cumulatively bought ₹7,739.00 crore of Indian equities, while they sold ₹7,751.43 crore — resulting in an outflow of ₹12 crore on Friday. Meanwhile, DIIs infused ₹7,932.73 crore and offloaded ₹7,530.04 crore, registering an inflow of ₹402.69 crore.

FIIs have sold Indian equities 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 have since weighed on market sentiment.

The US Federal Reserve decision to hold rates and refrain from making hawkish indications has emboldened the bulls to make a strong comeback in the mother market US with S&P rising 1.9 per cent yesterday, according to market analysts.

Experts project short covering by FIIs in the near-term as they turn buyers over positive global cues. With Brent crude crashing to the $85 per barrel mark and expectations of a pause in rate hikes by the Fed, foreign investors may start buying Indian equities soon, said analysts. This could lead to short covering which can take 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 will decline in H2 of CY2024 have facilitated market recovery. The positive global sentiments can embolden the bulls in India to stage a comeback. Since FIIs are short in the market, short covering is a possibility,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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Updated: 03 Nov 2023, 09:52 PM IST