FIIs take U-turn on easing US bond yields; DIIs sell over ₹100 crore
Foreign institutional investors (FIIs) took a U-turn and snapped their selling streak on Friday, October 13, over easing US bond yields even as domestic equity benchmarks settled lower dragged by weakness in banking and information technology (IT) stocks. The domestic institutional investors (DIIs) instead turned net sellers and offloaded ₹102.88 crore in Indian stocks today as frontline indices pared all gains dragged by index heavyweights.
As per the NSE data, FIIs cumulatively bought ₹10,317.87 crore of Indian equities, while they sold ₹10,000.86 crore — resulting in an inflow of ₹317.01 crore on Friday. Meanwhile, DIIs infused ₹7,660.98 crore and offloaded ₹7,763.86 crore, registering an outflow of ₹102.88 crore.
“There are positive developments that can strengthen the rally in the market. Steadily declining trend in the dollar index and the US bond yields, declining crude and sharp dip in FII selling in the cash market are big positives for the market,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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Stock Market Today
Domestic benchmark equity indices slipped into the negative territory on Friday despite some intraday recoveries. In the last hour of the trade, index heavyweight stocks such as HDFC Bank, Kotak Mahindra Bank, State Bank of India, and Axis Bank witnessed major selling dragging down the benchmark indices.
Nifty 50 lost 42.95 points to settle at 19,751.05. The Sensex falls 125.65 points to close at 66,282.74. Further, IT stocks also weighed on the market sentiment on the backdrop of US inflation worries. Tata Consultancy Services (TCS) (+0.87 per cent), Infosys (-2.23 per cent) and HCL Tech (+2.64 per cent) flagging concerns of slower growth weigh on sentiments.
“Weak revenue guidance of the IT sector and the current uptick in crude prices weighed on the sentiment. While higher-than-expected US inflation data pulled down the week’s early uptrend, which was positive on remark of less hawkish US Fed meeting,” said Vinod Nair, Head of Research at Geojit Financial Services.
However, analysts noted that some optimism was visible from domestic factors like a sharp decline in domestic inflation and robust industrial production data, along with bright earnings expectations for Q2.
Also Read: Market Wrap: Sensex falls 125 points, Nifty 50 settles below 19,800, dragged by IT, banking stocks
Where are markets headed?
There are two major macro trends that can influence the market, according to market experts. The global trend is slightly negative while the domestic trend is largely positive. The US retail inflation for September at 3.7 per cent came slightly higher than expected.
‘’The implication of this higher inflation trend is that the fight to bring the US inflation to the long-term target of 2 per cent will take more time and, therefore, rates will remain higher for longer. This will restrain a rally in equity markets,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Technical View: The bulls were able to protect the level of 19,600 during the day and the strength may continue as long as the index remains above 19,600, according to market experts.
‘’Only a decisive fall below 19,600 might trigger serious long unwinding in the market, till then a buy on dips strategy to favor the market. On the higher end, resistance is visible at 19,850; above 19,850, the index might move towards 20,000,” said Rupak De, Senior Technical Analyst at LKP Securities.
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Updated: 13 Oct 2023, 08:43 PM IST
