Domestic investors sell off Rs 5,540 crore of equities in last eight sessions

Domestic institutional investors (DIIs) sold a net of Rs 5,540 crore of equities in the past eight sessions even as Indian market rallies.

Data from the National Stock Exchange (NSE) showed that from October 20 till date, DIIs sold Rs 5,541.83 crore in Indian shares. They remained net sellers for seven out of eight sessions.

This selling is despite the Sensex and Nifty trading near record highs. Over the last 15 sessions, the benchmark indices jumped over 6 percent. The Sensex hit the 61,000-point mark while Nifty touched 18,000.

Analysts said that given the recent rally in the stock markets, DIIs are booking profits and raising cash to be deployed at the next fall. Also, some of the selling may be prompted by redemption pressure from investors who may also think similarly.

Post June 2022, the flow of DII buying has slowed. From the start of January till June DIIs bought over Rs 2.31 trillion of shares at an average of over Rs 35,000 crore every month. However, since July, the inflow has slowed. In July, they bought just Rs 10,500 crore while in August they turned net sellers to the tune of Rs 6,900 crore. In September and October, they bought around Rs 14,000 crore and Rs 9,200 crore, respectively.

“DIIs are booking profits since they are sitting on good profits from the rally which took the Nifty above 18,000. It has been easy for DIIs to book profits without causing corrections in the market since FIIs (foreign institutional investors) have been sustained buyers. During the last five trading sessions, FIIs bought equity worth over $2 billion in the cash market. The DII strategy of buying on dips has been smart and has paid them good dividends,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Analysts added that DIIs have been acting largely contrary to FPIs. They were buyers when FIIs were sellers and now they have turned sellers when the FIIs have become buyers, they said. FIIs remained net buyers of $2.52 billion in the last seven sessions.

“DIIs have a better perspective about the macro situation and the micro performances in India while FPIs (foreign portfolio investors) have the globe as their target market and within that, relatively, they would rate India as a market at a particular point in time,” said Deepak Jasani, head of retail research, HDFC Securities.

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