Foreign institutional investors made a net purchase of Rs 4,240 crore in Indian stocks on October 27, their largest daily investment this month. While domestic investors sold Rs 1,250 crore, mid-cap and small-cap stocks saw gains, indicating a shift in interest toward smaller market segments.
Foreign institutional investors (FIIs) showed renewed interest in Indian equities on October 27, pouring a net Rs 4,240.39 crore into the market. This investment represents the highest single-day buying by foreign funds in the country this month, signaling a notable shift in sentiment compared to recent sessions. In contrast, domestic institutional investors (DIIs) chose to lock in profits, selling a net Rs 1,250.03 crore of shares, marking their first net selling session since mid-October.
The broader market showed resilience, with the Nifty 50 closing flat at 22,750 points. Investors appeared to favor mid-cap and small-cap stocks, which rose 1% and 2.7%, respectively. The volatility index, India VIX, also fell by 4.4%, indicating that market anxiety is cooling down. This suggests that investors are actively looking for value in market segments that may have seen corrections recently, despite the broader index holding steady.
While the mid-cap and small-cap spaces saw gains, the IT sector faced renewed pressure. The Nifty IT index dropped over 1.4% following a revised revenue outlook from Infosys. This decline negatively impacted major sector peers like Tata Consultancy Services and Wipro, as investors reacted to the cautious guidance from the industry leader, which often influences sentiment for the wider IT sector.
Macroeconomic challenges remain a central focus for the market, particularly regarding energy costs. Brent crude oil prices are currently hovering around US$116 per barrel due to ongoing geopolitical tensions in West Asia. Higher oil prices can increase costs for manufacturers and fuel inflation, which investors typically track closely for its impact on company profit margins.
Despite these global pressures, the government is continuing to push domestic growth. Recent updates show the government has cleared defense acquisition proposals valued at Rs 2.12 lakh crore, with the majority of funds directed toward local manufacturers. Additionally, infrastructure development remains a key government priority, with expenditure reaching Rs 17.73 lakh crore across 1,853 active projects as of September. These projects are primarily focused on improving transport and logistics efficiency, which could have long-term benefits for industrial growth.
Investors may track whether the surge in FII inflows continues, or if the profit-taking by domestic institutions signals a broader trend of caution. The ongoing performance of the IT sector and the stability of global oil prices will also remain key factors that could influence market direction in the coming sessions.