DIIs invest over ₹500 crore in Indian equities, FIIs offload ₹495 crore: What's fueling the selling spree?
₹533.75 crore during the session. As per the NSE data, FIIs cumulatively bought ₹8,854.08 crore of Indian equities, while they sold ₹9,349.25 crore --- resulting in an outflow of ₹495.17 crore. Meanwhile, DIIs infused ₹6,027.22 crore and offloaded ₹5,493.47 crore, registering an inflow of ₹533.75 crore.
According to analysts, the selling spree by FIIs is primarily due to higher US bond yields, a stronger US dollar against its peers. Also, potential interest rate hikes by the US Federal Reserve is also pushing FIIs to pull out funds from the domestic market. The consistent buying by DIIs is still not enough to limit the market volatility caused by the impact of global headwinds.
The US 10-year yield is trading at a 16-year high and the 2-year yield is trading at 5 per cent. The dollar index has also moved above 103. At the same time valuation of Indian equity is not cheap and is supported by funds flow, noted market analysts.
In the cash market, foreign portfolio investors (FPIs) sold stocks for ₹10,921 crore and were net sellers on 10 days and buyers in only three days in August, so far, according to analysts. ‘’The influence of higher bond yields and concerns about potential rate hikes in the US is prompting FIIs to withdraw funds from the domestic market, contributing to the market's volatility,'' said Vinod Nair, Head of Research at Geojit Financial Services On Tuesday, Sensex and Nifty ended flat as the gains in shares of select heavyweights such as ITC, Larsen & Toubro and Axis Bank were offset by losses in those of HDFC Bank, ICICI Bank and TCS. Sensex closed 4 points higher at 65,220 while the Nifty closed the day at 19,396, up 3 points.
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