FII Selling Pressure Eases as Indian Economy Proves Resilient
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New Delhi, Dec 7 (NationPress) In a significant shift in strategy, foreign institutional investors (FIIs) have now become buyers, signaling the conclusion of the prolonged FII selling period as the Indian economy exhibits resilience despite prevailing geopolitical conditions, market analysts noted on Saturday.
Data from the National Securities Depository Limited (NSDL) indicates that FIIs have invested Rs 24,453 crore this month (up to December 6), with Rs 17,921 crore directed towards equity through exchanges, while the remainder was invested via the primary market.
The reversal to a buying stance by FIIs in early December has significantly shifted market sentiment, contrasting their consistent selling trend over the past two months, according to market experts.
In October, the total selling by FIIs through exchanges amounted to Rs 113,858 crore, which decreased to Rs 39,315 crore in November.
Siddhartha Khemka from Motilal Oswal Financial Services Ltd stated that FIIs have kicked off December positively, contributing to a notable uplift in market sentiment.
“We anticipate that the Nifty will continue its steady upward movement next week, supported by potential liquidity increases following the RBI’s CRR cut, encouraging news regarding government policies, and the return of FII inflows,” he mentioned.
This shift in FII strategy is reflected in stock price trends, especially within large-cap banking stocks, where FIIs had previously been sellers.
Experts believe this sector has further potential for growth, as it is reasonably valued and expanding at a healthy rate.
FIIs have indicated a gradual return, providing much-needed relief following the intense selling pressure observed in October and November. Despite significant FII selling, inflows from domestic institutional investors (DIIs) have kept the market buoyant over the last two months.
Additionally, for the first time in eight weeks, India's foreign exchange reserves saw a modest increase of $1.51 billion, reaching $658.091 billion for the week ending November 29.
According to the weekly data from the RBI, foreign currency assets, a key component of the reserves, rose by $2.061 billion to $568.852 billion for the week ended November 29.
