FIIs continue selling spree, offload ₹5,700cr in Indian equities
What's the story
Foreign institutional investors (FIIs) have continued their selling spree in Indian equities for the fifth consecutive trading session on Friday. According to provisional market data from the National Stock Exchange (NSE), FIIs sold shares worth ₹5,688 crore. The latest round of net selling by overseas funds has totaled ₹30,142 crore so far this month.
Market impact
Nifty 50 closed 1% lower
The ongoing FII selling has taken a toll on Indian equities, with the Nifty 50 index ending 1% lower on Friday after a volatile session. On the BSE, companies lost nearly ₹16 lakh crore in market capitalization over the week, including about ₹7 lakh crore on Friday alone. The trend has been largely driven by foreign investors' persistent caution amid global uncertainties such as stubborn US inflation and rising geopolitical tensions in the Middle East.
DII response
DIIs step in to support markets
In the face of aggressive foreign selling, domestic institutional investors (DIIs) have stepped up their game. They have recorded net buys in all five sessions this week, with the highest inflow on Friday at ₹5,843 crore. For the month so far, DIIs have bought more than ₹55,736 crore worth of shares. Their buying has helped cushion the impact of FII outflows on Indian equities.
Market dynamics
US dollar's strength weighs on rupee
The FII withdrawal from Indian equities can be traced to a stronger US dollar and rising treasury yields, making emerging markets less appealing. Indian rupee (INR) closed at 88.7175 per US dollar on Friday, unchanged for the day but down 0.7% for the week, its biggest weekly loss since late August. Market participants will closely monitor next week's US non-farm payrolls data, as any signs of a cooling labor market could change rate cut expectations and possibly reverse FII outflows.