On Wednesday, September 27, the Indian stock market showed signs of recovery as both the Sensex and Nifty snapped their six-day losing streak. However, amidst this positive development, Foreign Institutional Investors (FIIs) continued their selling streak, raising concerns in the financial arena. On the flip side, Domestic Institutional Investors (DIIs) shifted gears and became net buyers once again, injecting ₹386 crore into Indian stocks.
According to data from the National Stock Exchange (NSE), FIIs collectively purchased ₹9,575.17 crore worth of Indian equities. However, their selling activity was even more substantial, with a total offload of ₹9,929.52 crore. This resulted in a net outflow of ₹354.35 crore on Wednesday. In contrast, DIIs displayed a more optimistic stance by investing ₹8,419.68 crore and offloading ₹8,033.40 crore, leading to a net inflow of ₹386.28 crore.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the current state of the Indian equity markets. He pointed out that a “triple whammy” of factors is currently impacting the market’s performance. Firstly, there is the rising value of the dollar, which can have implications for foreign investments and currency exchange rates. Secondly, the spiking US bond yields indicate a shift in global investment preferences, which can influence capital flows. Lastly, the high prices of Brent crude oil add to the complexities, as they affect not only India’s oil imports but also the broader global economic outlook.
Furthermore, Dr. Vijayakumar highlighted that the cues from the US market are currently negative. It appears that the market is factoring in a scenario of a “higher for longer” interest rate regime in the United States. Such a scenario may not be favorable to equity markets in the near term, as higher interest rates can lead to increased borrowing costs for businesses and affect consumer spending patterns.
While the Sensex and Nifty have shown signs of a rebound, the continued selling by FIIs and the complex global economic factors at play indicate a cautious approach in the Indian equity markets. The dynamics of the market, particularly in light of the global macroeconomic landscape, will continue to be closely monitored by investors and experts alike.
