Foreign investors have sold Indian shares for 15 straight sessions, with Rs 5,285 crore offloaded recently. Domestic investors continue to act as a buffer, buying Rs 3,319 crore to keep indices stable despite the heavy foreign outflows.
Indian equity markets are currently seeing a tug-of-war between foreign and domestic investors. Foreign institutional investors (FIIs) have continued their selling streak, marking 15 consecutive sessions of net outflows. In the latest trading session, FIIs sold shares worth Rs 5,285.37 crore. Since the beginning of October, the total selling by foreign investors has reached nearly Rs 50,000 crore, which reflects a cautious sentiment toward emerging markets.
Countering this trend, domestic institutional investors (DIIs) are stepping in with consistent buying. In the latest session, DIIs purchased shares worth Rs 3,319 crore. This domestic liquidity has been a crucial support for the market, with cumulative DII buying in October exceeding Rs 51,000 crore. This balance between foreign selling and domestic buying has helped indices like the Sensex and Nifty 50 maintain their levels, preventing a deeper decline despite the heavy foreign withdrawal.
While benchmark indices remain resilient, some segments such as midcaps and smallcaps have faced selling pressure and profit-taking. Market sentiment received a boost from positive quarterly earnings, particularly from major IT firms like Tata Consultancy Services and HCL Technologies. These results, along with a stabilization in oil prices and the Indian rupee, have provided a temporary cushion against the global selling wave.
The macroeconomic picture also shows signs of strength. Official data indicates strong fiscal health, with direct tax collections showing significant growth. Corporate tax collections have risen by over 20% compared to the previous year. Additionally, the collection from Securities Transaction Tax (STT) has increased by 51.6% to reach Rs 46,840 crore, highlighting high turnover in the markets.
Investors should note that risks remain, particularly regarding international factors. Persistent concerns over US inflation and its impact on the US Federal Reserve's policy decisions remain a key variable. If US inflation data continues to print higher than expectations, it could lead to further adjustments in global investment portfolios, potentially impacting Asian technology sectors.
Regulatory developments are also a focus point. The market is awaiting updates on derivative settlement processes, with a SEBI advisory committee currently reviewing potential changes to market timings and order treatment. The next steps for investors will be to monitor incoming quarterly results, updates on US interest rate policies, and any official announcements from SEBI regarding market regulations.