Foreign institutional investors (FII) remained a net seller on the Septembe’s last trading session and offloaded shares worth net Rs 1,685.70 crore, on September 29, 2023, according to the provisional data available on the NSE. Meanwhile, the domestic institutional investors (DII) added shares worth net Rs 2,751.49 crore on Friday.
“Persistent FII selling in emerging markets, including India, in September has taken a toll on markets. If FII outflows gain pace, markets could be in for extended downward spiral, as overseas investors would park their funds in the safe haven dollar securities,” Shrikant Chouhan, Head of Research (Retail), Kotak Securities.
In the month of September, FIIs offloaded shares worth net Rs 26,692.16 crore while DIIs added equities worth net Rs 20,312.65 crore. “After sustained buying in the previous three months, FPIs have turned to sustained sellers in September having sold stocks for Rs 26,689 crores in the cash market. This sustained selling has been in response to steady dollar appreciation which took the dollar index close to 107 and the steady rise in the US bond yields which took the US 10-year bond yield to around 4.7%. The spike in the Brent crude to $97 also weighed on FPI selling. However, last Friday witnessed marginal decline in the dollar index, US bond yields and Brent crude. This has emboldened the DIIs to buy aggressively thereby imparting resilience to the market,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Foreign institutional investors (FII) or Foreign portfolio investors (FPI) are those who invest in the financial assets of a country while not being part of it. On the other hand, domestic institutional investors (DII), as the name suggests, invest in the country they’re living in. Political and economic trends impact the investment decisions of both FIIs and DIIs. Additionally, both types of investors – foreign institutional investors (FIIs) and domestic institutional investors (DIIs) – can impact the economy’s net investment flows.