Foreign Institutional Investors (FIIs) have continued their trend of offloading Indian equities, remaining net sellers in the past week. Data from provisional exchanges indicates that FIIs sold approximately ₹171.4 billion. In contrast, Domestic Institutional Investors (DIIs) emerged as strong market supporters, stepping in as net buyers with investments totaling ₹97.8 billion during the same period.
This ongoing trend marks the tenth consecutive month of net outflows from FIIs. Since April, they have withdrawn a significant ₹563.6 billion from Indian equities, while DIIs have injected ₹394.8 billion. This dual trend highlights a striking imbalance between foreign and domestic investor sentiment.
The backdrop of these market movements is heavily influenced by geopolitical developments. Recently, President Donald Trump announced an extension of the US-Iran ceasefire until Tehran puts forth a unified proposal to resolve its conflict with the U.S. and Israel. While this announcement has temporarily alleviated some fears regarding geopolitical escalation, the overall climate of uncertainty remains, likely impacting investor confidence.
Last week, FIIs were net sellers throughout all five trading sessions, with their selling volume intensifying in the latter half of the week. Consequently, the Nifty index ended its two-week winning streak, closing down approximately 2% as a sharp decline was observed towards the week’s end. Market sentiment has turned cautious, driven by a lack of clarity regarding geopolitical tensions and the status of ongoing negotiations.
Additionally, Brent crude prices have remained elevated, largely due to persistent supply concerns associated with the critical Strait of Hormuz, which has kept energy markets on high alert.
Looking forward, institutional investment activity is anticipated to be influenced by global news developments, particularly the ongoing US-Iran negotiations, given their implications for geopolitical stability and global energy markets. Next week will also see significant focus on the Federal Open Market Committee (FOMC) meeting in the U.S. and the Bank of Japan’s rate decision, both of which could shape institutional activity and the broader context for global equity markets, according to insights from Pabitro Mukherjee, Associate Vice President of Research at Bajaj Broking.
