Domestic institutional investors (DIIs) seem to have started taking profits off the table, as market valuations turn expensive near record high levels.
Data available with corporate database AceEquity suggests DIIs sold a net of Rs 6,273.94 crore worth of stocks in the past nine sessions, as key stock indices approach record levels. In total, the institutional category was net sellers in eight out of the past nine sessions.
During this period, foreign portfolio investors (FPIs) were net buyers to the tune of Rs 21,792 crore. They were buyers in eight out of the previous nine sessions, data shows.
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FPIs have turned buyers and DIIs have turned sellers in recent days, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. DIIs are likely to sell at higher levels and many retail investors might be tempted to book some profits, he added.
The benchmark Sensex and Nifty surged nearly 1.5 per cent each this week.
On November 1, the 30-share BSE Sensex crossed the 61,000 mark and the broader NSE Nifty touched 18,000. The domestic indices, however, traded lower in the previous two sessions.
Vijayakumar of Geojit Financial Services said there are two broad trends (one negative and the other positive) in the market now. The negative trend is the rising interest rates globally while rising FII inflow is a clear positive and these two factors will keep the Nifty in a range with no breakouts or breakdowns for the near term, he added.
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Meanwhile, foreign investors turned sellers again in October amid a hawkish stance by the US Federal Reserve and sharp depreciation in rupee. Although, the pull-out was much lower than September’s figure.
According to the data available with depositories, FPIs sold equities worth a net of Rs 8 crore in October. This came following a net sell-off of Rs 7,624 crore in September; an investment of Rs 51,204 crore, and Rs 4,989 crore in August and July, respectively. Prior to that, FPIs were net sellers in Indian equity markets for nine months in a row beginning October 2021.
