Bulls managed to get back their hold on Dalal Street last week as well as in the month of April after the rout in March. However, the picture was mixed at the FII desk.
Last week, foreign institutional investors net bought Rs 1,652 crore worth of shares in cash market. But the flow was quite volatile in the entire month of April.
They remained net sellers for the fourth consecutive month, offloading Rs 5,208.50 crore of shares during April following the biggest ever monthly outflow of Rs 65,816.70 crore in March.
Domestic institutional investors (DIIs) were also sellers during last month with very less outflow of Rs 117 crore compared to FIIs. But they net bought Rs 2,896.4 crore last week.
With support from FII and DIIs, benchmark indices gained nearly 8 percent each last week. Both rallied over 14 percent in April.
Overall, April was a recovery month for the market after a 23 percent correction in March, largely led by liquidity following stimulus measures announced by governments and central banks globally, along with slowing rate of COVID-19 infections in the United States and Europe, reports of re-opening of economies, and hopes of a bigger fiscal package from the Centre.
Investors' wealth during April increased by Rs 15.92 lakh crore after losing Rs 33.38 lakh crore in March — the worst month since the 2008 global financial crisis.
This week is expected to be volatile and consolidative in nature especially after a rally seen last week. History suggests that the month of May is not a good for the market.
"Markets are expected to keep an eye on long awaited stimulus package as well as mutual fund investors' behaviour on the inflows and outflows from D-Street. Volatility will remain higher in the coming week and a lot of volatility is expected in small and midcap stocks, although they will face selling pressure at higher levels," Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote told Moneycontrol.
He added that investors should be in a wait-and-watch mode, preserve cash by not aggressively investing at current levels and selectively book profits in order to raise liquidity.
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