Domestic Institutional Investors bought ₹1,018 crore worth of Indian shares on July 17, offering support as Foreign Institutional Investors sold ₹376 crore. This marks three days of FII selling, though the pace has slowed significantly compared to earlier this week.
Indian markets saw a divergence in institutional activity on July 17, with domestic investors providing a buffer against continued selling by foreign funds. Domestic Institutional Investors (DIIs) purchased equities worth a net ₹1,017.89 crore, according to provisional data from the stock exchanges. Simultaneously, Foreign Institutional Investors (FIIs) remained net sellers for the third day in a row, offloading shares worth ₹376.41 crore.
While the selling by foreign investors persists, the intensity of these outflows has reduced significantly. In the previous trading session, foreign funds had pulled out over ₹4,200 crore from the Indian market. The moderation in selling on July 17 helped alleviate some immediate pressure on the benchmark indices.
Despite the recent three-day outflow trend, the broader context for July remains more stable than the previous month. Foreign investors had been net buyers during the first half of July, infusing over ₹4,500 crore into the market. This stands in contrast to the volatility seen in June, when foreign investors withdrew nearly ₹49,000 crore from Indian equities. The fact that FIIs remain marginal net buyers for the month of July provides a different perspective compared to the heavy outflows witnessed during the previous quarter.
The market reaction to these flows was positive, with benchmark indices ending the week on a high note. The BSE Sensex gained 806.45 points, or 1.05%, closing at 78,257.88. The Nifty 50 rose by 262.20 points, or 1.09%, to finish at 24,334.20. Much of this upward momentum was driven by gains in the IT and private banking sectors, as market participants reacted favorably to better-than-expected June-quarter earnings from major index companies. When large-cap companies report strong quarterly results, it often offsets concerns related to temporary institutional selling, as seen in the latest trading session.
Moving forward, investors will watch whether the moderation in FII selling continues into the next week or if the trend of net outflows persists. A key monitorable for the coming sessions will be the sustainability of DII buying, which has been crucial in maintaining market stability during periods of foreign volatility. Additionally, market participants will track incoming earnings reports and any shifts in global liquidity conditions that may influence foreign investor sentiment toward emerging markets like India.