According to data from the NSE, FIIs together purchased 9,850 crore of Indian stocks while selling 10,074.71 crore, resulting in a loss of 224.22 crore.
On September 8, despite local markets reaching a six-week high, which was driven by advances in energy stocks, foreign institutional investors (FIIs) continued to sell. Today's session saw a net increase in stock purchases by domestic institutional investors (DIIs).
According to data from the NSE, FIIs together purchased 9,850 crore of Indian stocks while selling 10,074.71 crore, resulting in a loss of 224.22 crore. With an inflow of 1,150.15 crore, DIIs injected 8,324.05 crore and offloaded 7,173.90 crore.
The cash market has seen FII sales of $8,608 crore and DII purchases of $5,715 crore so far in September. Despite FII selling, economists claim that sustained DII investment backed by strong retail buying is pushing the market upward.
Despite a cautious global market on Friday, the domestic equity indexes Sensex and Nifty ended the day higher for the sixth session in a row. The benchmarks produced their best week in more than two months, gaining over 2% each, as they achieved increases for the second consecutive week.
The Nifty ended the day at 19,819.95, up 93 points or 0.47 percent, while the Sensex finished the day 333 points, or 0.50 percent, higher at 66,598.91. Sensex has increased 2.73 percent while Nifty has increased 2.94 percent during the past six days.
After reaching a new record high of 32,692.74 throughout the session, the BSE Midcap index concluded with a significant gain of 0.92 percent at 32,672. The BSE Smallcap index also reached a new record high during the session of 38,369.21 but concluded at 38,266.53, up 0.43 percent.
On track to reach new highs of around 19,900, the Nifty
Despite net institutional selling by international investors, the Nifty has gained 434 points thus far this month. Analysts remarked that this, together with the frenzied activity in the mid- and small-cap groups, indicate that retail investors have been actively participating in the surge.
With gains of 0.6% and 1%, respectively, small- and mid-cap stocks continued their streak of record performance and continued to outperform the benchmark indices. Market observers predict that the Nifty would reach record high levels of about 19,900–20,000 due to the present market sentiments of continuous buying by DIIs and the strength in broader indexes.
The 'buy on dips' technique is profitable for traders. With the right market conditions, the rise might approach the 19,991-point record high of the Nifty. L&T and RIL's support for the front-line banking and IT companies could help the rise last for a while. According to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, "bubble growing up in parts of small-caps is an issue of concern.
The Nifty has been strengthening and is edging closer to its lifetime high of 19,992, according to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services. "Sentiments are buoyant and may lift market towards its life high and 20k mark over the next few days," said Khemka, citing the improved monsoon and India's upcoming G20 summit.
What causes FIIs to sell?
As the US currency rises, US treasury yields recently spiked, and persistent FII selling continue, analysts observed that the current surge in domestic markets may encounter obstacles.
"The rising US bond yields and the strengthening dollar have sparked the FII selling." According to Dr. V K Vijayakumar of Geojit, the FIIs are likely to sell given that the yield on the US 10-year bond is 4.29 percent and the yield on the 2-year note is 5 percent.
However, DIIs have consistently purchased securities as a result of strong inflows into domestic mutual funds. According to Jateen Trivedi, VP Research Analyst at LKP Securities, "the sustained performance by DIIs has played a crucial role in preventing the rupee from falling below the 83.25 level during recent corrections."
Where will Nifty go?
As long as the index continued to trade above a crucial moving average, the overall trend remained strong, according to Rupak De, Senior Technical Analyst at LKP Securities.
The Nifty faced a severe obstacle, though, in the form of heavy call writing at the 19,900 strike price. Looking ahead, the index can only potentially move towards the 20,200 level with a decisive move over the 19,900 barrier. On the other hand, there was a lot of put writing at the 19,700 level, which gave the Nifty good support,'' added De.
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