Foreign Portfolio Investors (FPIs) were net sellers in Indian equities after a day of their strong buying, whereas domestic institutional investors (DIIs) turned net buyers on June 23. FPIs sold Rs 1,874 crore in the cash segment of the market, as per provisional data published on the exchange. In contrast, DIIs were net buyers of shares to the tune of Rs 5,592 crore.
DIIs purchased equities worth Rs 13,499 crore and offloaded shares amounting to Rs 7,908 crore. FPIs, on the other hand, bought stocks worth Rs 8,570 crore while selling Rs 10,444 crore.
So far in June, FPIs have bought Rs 2022.83 crore in Indian equities, while DIIs have continued to provide strong support with net inflows of Rs 62,378 crore. Year-to-date, FPIs have withdrawn Rs 1.27 lakh crore, whereas DIIs have infused Rs 3.47 lakh crore into the market.
Market Performance
Indian equities reversed some of the previous day’s gains, with the Nifty 50 closing below the 25,000 mark, down by 141 points on Monday. The benchmark index had a gap-down opening at 24,940 and hit an intraday low of 24,825, before showing significant recovery to 25,057 in the afternoon, indicating the continuation of the buy-on-dips approach. The index eventually finished at 24,972.
Most sectoral indices closed in the red, barring metal and pharma. Technology, metal, and auto stocks witnessed significant selling pressure compared to others. The broader markets outperformed the benchmark indices, with the Nifty Midcap 100 and Smallcap 100 indices continuing their upward momentum for another session, rising 0.36 percent and 0.7 percent, respectively.
On the derivatives front, bearish sentiment was observed in Infosys, Larsen & Toubro, HCL Technologies, Hero MotoCorp, and Mahindra & Mahindra. However, Trent, Bharat Electronics, Hindalco Industries, Tata Consumer Products, and Bajaj Finance saw buying interest.
Last Friday, the markets had built up in anticipation of easing Middle East tensions, following the US announcement of a two-week window to deliberate its involvement in the Israel-Iran conflict. However, the unexpected US airstrike on Iran’s nuclear facilities over the weekend disrupted those expectations, triggering a sharp rise in crude oil prices and leading to consolidation in the domestic equity market, said Vinod Nair, Head of Research at Geojit Financial Services.
Despite the initial setback, the market recovered most of its losses, supported by gains in capital goods and metal stocks, as fears of an immediate oil supply disruption remained low, according to him.
Crude-sensitive stocks are expected to remain in focus amid volatility in oil prices. Brent crude oil prices climbed above $80 a barrel initially due to concerns over potential supply disruptions from the Strait of Hormuz, but later cooled down, trading marginally higher at $77.32 a barrel at the time of writing this article.
IT stocks came under pressure due to uncertainty around global tech spending, exacerbated by weak earnings reported by Accenture.
The defence sector saw strong traction, particularly in shipbuilding stocks, pushing the Nifty India Defence index up by 2.1 percent. Shares of Small Finance Banks (SFBs) rallied after the RBI eased lending norms by reducing the mandatory priority sector lending requirement from 75 percent to 60 percent of total loans.
Overall, “Indian equities are expected to remain in consolidation mode, with investors closely tracking developments on the global geopolitical front,” said Siddhartha Khemka, Head – Research, Wealth Management at Motilal Oswal Financial Services.
While he anticipates momentum to continue in defence and upstream oil companies, banking and financial stocks are likely to remain in favour due to RBI policy support and liquidity-boosting measures.
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