FIIs’ third biggest single day dump ever: Rs 10,000 crore sold on August 5

the sell-off on Monday was sparked by the Bank of Japan raising interest rates and rising unemployment figures in the US.

On Monday, when the Indian markets plunged on the back of global concerns, foreign portfolio investors (FPIs) offloaded shares worth over Rs 10,000 crore – the highest single-day selling since June 4 when the election results were announced. August 5 also marked the third biggest single-day FII selling in India.

As per provisional data from NSE, FPIs were net sellers at Rs 10,074 crore on August 5. Foreign investors, who have been net sellers in the current month till date after two successive months of buying, had sold shares worth Rs 12,436.22 crore on June 4.

Interestingly, even as FPIs continue to see-saw in terms of their investment approach in India, their domestic counterparts have been aggressively buying shares on the back of strong flows from mutual funds and retail investors.

On Monday, domestic institutional investors (DIIs) net bought shares worth Rs 9,156 crore on Monday.

Also Read | DIIs net buy shares worth Rs 9,156 crore on August 5

This has led to a scenario wherein the gap between the ownership of DIIs and FPIs have shrunk to record levels, hitting a historic low in the June quarter.

Moneycontrol had earlier reported that FPIs' share in NSE-listed companies dropped to a 12-year low of 17.38 percent by the end of June, down from 17.72% in March while DIIs’ enthusiasm has driven their overall holding to 16.23 percent, with the cumulative stake of domestic mutual funds reaching an all-time high of 9.52 percent, as per data from primeinfobase.

This shift in Q1FY25 has narrowed the gap between FPI and DII holdings in domestic equities to an unprecedented low at just 1.15 percentage points. The widest gap was recorded in March 2015, with DIIs were trailing FPIs by 10.3 percentage points.

However, we expect FIIs to largely remain positive on Indian equities, with a bias towards largecaps along with a selective approach in the mid and smallcap packs. It won't be surprising if we soon witness a calibrated re-entry of FIIs into Indian equities, said Nirav Karkera of Fisdom

Meanwhile, the sell-off on Monday was sparked by the Bank of Japan raising interest rates and rising unemployment figures in the US, which have raised fears of a global economic slowdown. The higher rates in Japan led global investors to sell assets bought with yen loans.

Adding to the market's troubles were increasing geopolitical tensions, with Iran, Hamas, and Hezbollah threatening retaliation against Israel after the assassination of a Hamas leader and a Hezbollah military commander.

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