Domestic investors, both institutional and retail, have been showing increasing influence in the Indian stock markets for a long time, as their foreign counterparts have been selling stocks in huge amounts in the past few times.
According to NSDL data, in just 12 days of October, it has been the most sold month by foreign investors in the equity market. So far this month, foreign investors have sold shares worth Rs 58,711 crore. This is the best seller of any month this year.
During this week (7 Oct-11th Oct), according to information, foreign investors sold shares worth Rs 31,568.03 crore. Last week, they sold shares worth Rs 27,142.17 crore.
On days of extreme market volatility, FPIs have been pulling out their stakes aggressively. Between September 30 and October 4, FPIs sold shares worth about Rs 27,142.17 crore, and the most significant sale was witnessed on October 4, when they were sellers of a total of Rs 15,506 crore.
Domestic investors, especially mutual funds, countered this with strong buying, as mutual funds were net buyers of Rs 57,792.20 crore this month.
Some categories of domestic investors also showed confidence in the market despite external sales pressure. During this period, they took shares worth around Rs 11,633 crore. Insurance companies are also contributing to the buying, with purchases totaling Rs 1,859 crore.
Banks and Portfolio Management Services (PMS) were also big buyers, picking up shares worth Rs 723 crore and Rs 169 crore, respectively.
Seeing strong support from domestic investors, many market experts continue to remain optimistic about the stability of the Indian market. Experts believe that with strong support from domestic investors, India’s dependence on FPIs has decreased over time.
“The market traded sideways due to a lack of catalysts. A rise in US 10-year yields due to an unexpected rise in US inflation and a warning ahead of earnings season have added layers of sentiment to the market. Ongoing geopolitical challenges have prompted FIIs to shift focus its in affordable markets, which has an impact on the domestic market,” said Vinod Nair, Head of Research, Geojit Financial Services.