FII shift marks notable improvement in overseas investor sentiment
Foreign institutional investors (FIIs) snapped a prolonged dry spell to emerge as net buyers this week, amounting to Rs 3,386 crore, marking a notable improvement in the overseas investor sentiment.
This reversal was characterised by a distinct, alternate-day rhythm - with FIIs ramping up exposure on Monday, Wednesday, and Friday -culminating in an explosive surge of Rs 4,859 crore on Friday alone, heavily catalysed by passive fund realignments during the FTSE quarterly rebalancing, said analysts.
Conversely, domestic institutional investors (DIIs) reinforced their role as the market's resilient bedrock, with net buy of Rs 7,109 crore over the week, according to provisional exchange data.
“Interestingly, DIIs sustained a relentless buying streak across every single trading session before tactically stepping back on Friday to absorb the influx of global capital,” said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.
The FII shift marks a notable improvement in overseas investor sentiment after an extended period of sustained selling and offers a constructive signal for domestic equities, particularly amid improving global risk appetite and easing geopolitical concerns.
“Consistent domestic buying helped offset periods of market volatility and provided a strong foundation for the recent recovery in equities. Together with the return of positive FII flows, the strength of institutional participation suggests improving confidence in the market and should continue to support sentiment in the near term,” said PonmudiR, CEO, Enrich Money.
Benchmark Indices extended up move for the second week in a row as optimism surrounding the US-Iran peace deal, a decline in crude oil prices below the $80 mark, a sharp recovery in the Indian Rupee, and supportive global cues collectively fuelled buying interest during the week.
Nifty started the week on a positive note and rallied to intra-week high of 24,189 on Thursday session. However, some profit booking on Friday’s session saw the index gave up some of its weekly gains and closed the week at 24,013 levels up by 1.7 per cent.
Broader market outperformed with Nifty Midcap and small cap index closing higher by 2.9 per cent and 3.2 per cent, respectively.
Overall, easing geopolitical risks, moderating commodity prices, resilient domestic institutional participation, and improving global sentiment helped Indian equities maintain their upward trajectory, said analysts.
