New Delhi: In a clear change of strategy, foreign institutional investors (FIIs) have turned buyers, and the stage of relentless FII selling is now over, with the Indian economy remaining resilient despite the geopolitical conditions, market watchers said on Saturday.
According to the National Securities Depository Limited (NSDL) data, FIIs invested Rs 24,453 crore this month (till December 6). This included Rs 17,921 crore in equity through exchanges and the rest through the primary market.
Market experts say FIIs’ turning buyers in early December, a total reversal of their sustained selling strategy during the last two months, has altered market sentiments.
In October, the total FIIs selling through exchanges was Rs 113,858 crore. In November, the amount declined to Rs 39,315 crore.
According to Siddhartha Khemka of Motilal Oswal Financial Services Ltd., FIIs have started December on a positive note, significantly boosting market sentiment.
“Next week, we expect the Nifty to maintain its gradual upmove, driven by potential increase in liquidity post RBI’s CRR cut, positive news flows around government policies and return of FII inflows,” he mentioned.
The change in FII strategy is reflected in stock price movements, particularly in large-cap banking stocks in which FIIs have been sellers.
Experts say this segment has further room to grow since it is fairly valued and growing at a reasonable pace.
FII have signalled a slow return. This comes as a welcome relief after the relentless selling pressure witnessed in October and November. Despite heavy FII selling, domestic institutional investors (DIIs) inflows kept the market afloat in the last two months.
Meanwhile, India’s forex reserves have increased by a modest $1.51 billion for the first time in eight weeks, reaching $658.091 billion for the week ending November 29.
According to the weekly RBI data, foreign currency assets, a major component of reserves, increased by $2.061 billion to $568.852 billion for the week ended November 29.
—IANS
