Quote on FII flows 06 Dec 2025 from Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited
Below the Quote on FII flows 06 Dec 2025 from Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited
"December has begun with sustained selling by FIIs on all days of the first week. In the first week ending on 5th December, FIIs have sold equity for Rs 10401 crores in the cash market. This sell figure has been completely eclipsed by the sustained strong buying by DIIs who bought equity for Rs 19783 crores during this period. The fundamental reasons behind the FII selling and DII buying are different. FIIs are selling now primarily because of the sharp depreciation of the rupee by around 5 percent this year.
It is normal for FIIs to sell and take the money out during times of currency depreciation. On the other hand, DIIs have been investing systematically assisted by continuous fund flows, and recently they have been buoyed up by the robust GDP growth numbers and expectations of uptick in corporate earnings, going forward.
The 25 bp rate cut by the RBI and the proposed huge liquidity infusion have further improved sentiments in favour of the bulls. The decision to give further monetary stimulus to the economy even when the economy is firing on all cylinders reflects a courageous pro-growth central bank. With pro-growth fiscal and monetary policies, growth regaining momentum and indications of accelerating earnings growth, DIIs will continue to buy. But the trends suggest that at higher levels FIIs will again sell since they feel that valuations are on the higher side and they can sell and invest the money in cheaper markets. In this tug of war between FIIs and DIIs, there will be days of sharp movements in the markets, in response to news and events. For instance, if there is a fair trade deal between India and the US, that can buoy up the sentiments in both equity and currency markets."
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