FIIs turn net sellers in June, offload equities worth ₹3,565cr
What's the story
Foreign institutional investors (FIIs) have turned net sellers in early June, offloading equities worth ₹3,565 crore. This comes after a strong inflow of ₹19,860 crore in May. The trend reflects a cautious approach by FIIs amid global uncertainties and domestic challenges. Meanwhile, domestic institutional investors (DIIs) have been on a buying spree during the same period.
Market response
DIIs have been on a buying spree
In contrast to the cautious stance of FIIs, DIIs have been aggressive buyers, purchasing stocks worth ₹25,510 crore. This strong buying from DIIs has helped offset the selling pressure from FIIs and stabilize the market amid global uncertainties. However, analysts say that FIIs have been consistently offloading in the debt market due to a narrow gap between US and Indian bond yields.
Policy impact
RBI's rate cut has boosted market sentiment
The Reserve Bank of India (RBI)'s surprise monetary policy action has given a major boost to market sentiment. The central bank announced a 50-basis-point repo rate cut and a 100-basis-point reduction in the cash reserve ratio (CRR). VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted India's resilience amid bleak growth prospects in the US and China.
Investment strategy
Nifty could break above 25,200 levels
Despite high valuations leaving little room for a rally, market experts suggest a "buy on dips" approach. This is especially true as DII inflows continue to overshadow FII selling and the RBI shows confidence in growth. However, caution is advised for sectors exposed to global headwinds. Ajit Mishra, SVP of Research at Religare Broking, said technical charts indicate that Nifty could break above 25,200.