Foreign Institutional Investors (FIIs) turned net buyers in the equity markets on Monday, November 25, purchasing Rs 9,947.55 crore worth of equities (provisional data). This marked a significant shift, ending a streak of 38 consecutive sessions of net selling, providing a much-needed boost to the market sentiment.
FII and DII Trading Activity
In contrast, Domestic Institutional Investors (DIIs) became net sellers on the same day, offloading shares worth Rs 6,907.97 crore (provisional). DIIs had been net buyers for 13 consecutive sessions prior to this shift.
During Monday’s trading session, DIIs bought Rs 17,625 crore worth of equities but sold Rs 24,533 crore in shares, highlighting a significant change in their market strategy.
FIIs purchased Rs 85,252 crore worth of equities and sold Rs 75,305 crore worth of shares, signaling a shift in their approach after weeks of selling. The overall trading activity saw a balance in buying and selling, with the net buying by FIIs counteracting the selling by DIIs.
Year-to-Date Inflows Overview
For the year so far, FIIs have net sold Rs 2.84 lakh crore worth of equities, while DIIs have net bought Rs 5.56 lakh crore in shares. In the past week, FIIs offloaded Rs 11,414 crore in shares, taking their total net selling to Rs 1.55 lakh crore since October. The data suggests that FIIs have been cautious in their approach amid broader market fluctuations.
What Brought the Massive FIIs Buying?
HDFC Bank was one of the major gainers in Monday’s trading session, seeing a 2.3% increase in its stock price, closing at Rs 1,785.6 per share. The boost came following the MSCI (Morgan Stanley Capital International) index rejig, where HDFC Bank saw a much-anticipated increase in its weightage within the index.
Estimated $1.88 Billion Passive Inflows
This weightage adjustment was expected to bring in an estimated $1.88 billion in passive inflows to the bank’s stock. MSCI had earlier announced the weightage change in two stages.
The first phase, in August, was estimated to bring $1.8 billion in foreign inflows, and the second phase, which took effect on November 25, contributed to this increase in foreign investments.
Other Stocks Expected to Benefit
Along with HDFC Bank, other stocks likely to see increased foreign inflows due to the MSCI index rejig include Kalyan Jewellers, Alkem Laboratories, and Oberoi Realty. These companies are also expected to benefit from the increased weightage in the index, as foreign investors typically track the MSCI index closely.
Will the FIIs Buying Continue?
Commenting on the FIIs buying Anshul Jain, Head of Research at Lakshmishree investments said that in a major sentiment boost, markets witnessed a staggering ₹9,947 crore FII inflow in the previous session, largely driven by MSCI’s rejig in HDFC Bank’s weightage. This buying spree has revived optimism among market participants. However, technical levels remain crucial for confirming the bullish momentum.
Jain also added that a decisive move above 53,000 on Bank Nifty and 24,600 on Nifty could signal a sustained rally, turning sentiment decisively bullish. Until these critical levels are breached, cautious optimism is warranted. Traders should watch for these triggers closely while managing risk, as the market awaits confirmation of a broader trend shift.
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