Rebounce in FIIs sentiment as they turn net buyers of shares worth Rs 1246 crore, DIIs net buy Rs 1448 crore

Rebounce in FIIs sentiment as they turn net buyers of shares worth Rs 1246 crore, DIIs net buy Rs 1448 crore

Foreign institutional investors bounced back as net buyers after one odd session breaking their 16-consecutive sessions' streak of buying. On Monday, May 12, FIIs were net buyers of shares worth Rs 1246 crores while DIIs were net buyers of Rs 1448 crore-worth shares.

DIIs recorded gross purchases worth Rs 14,684 crore and sold Rs 13,235 crore. In contrast, FPIs bought equities worth Rs 12,775 crore and sold to the tune of Rs 11,528 crore.

For the year so far, FIIs have been net sellers of shares worth Rs 1,21,338 lakh crore, while DIIs have net bought Rs 2,26,612 lakh crore worth of shares.

Market Performance

Monday saw an amalgamation of a tripple effect from all that happened past week -- the UK-India FTA finalisation, the ceasefire reimposition between India-Pakistan and the US-China tariff war ease. Indian benchmark indices saw a rally after about flat to marginal returns for four weeks. But the trading session today ended with Nifty touching record high single-day gain of 3.81%, as observed since February 2021. Meanwhile, Sensex surged 3.74% at intraday but ended flat.

The mid- and small-cap segments outperformed the benchmark indices. The Nifty Midcap 100 and Nifty Smallcap 100 indices surged over 4% each. Market breadth turned positive, with the BSE advance-decline ratio at 6.12.

India VIX witnessed a sharp drop of 15% in today’s session.

All the sectoral indices ended in the green with realty, power, IT, and energy up between 4% and 6%.

Analysts suggest the progress in global trade after months of fear arising from two giants going head-on with a tariff war is a big relief. The U.S. and China announced a temporary rollback of trade levies for an initial 90-day period. The combined 145% U.S. duties on most Chinese imports will now be reduced to 30%. While China is likely to impose a 10% tariff on the US imports. All of this came in as an entire surprise.

A resolution or de-escalation, such as a tariff suspension deal, helps stabilize global markets. This reduced the threat levels arising out of the US' possibly heading into a recession. Because the US is the largest market for Indian IT services and a slowdown would affect Indian IT businesses as well.

This, combined with the ceasefire agreement between India-Pakistan - although much of this was already discounted in the weak ahead - and the UK-India FTA has further added to the Indian market's resilience.

Other positive headwinds include an early forecast for the southwest monsoon, expected to arrive in Kerala by May 27 -- earlier than the usual June 1 onset. Along with the upcoming Russia-Ukraine peace talks scheduled for May 15.

Trading volumes on the NSE cash market were higher by 13% than yesterday.