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Friday’s buying followed another massive investment of Rs 14,975 crore on Thursday, November 5, marking the biggest single-day FII purchase in Indian equities in more than a year.
The pace of foreign buying has accelerated in recent sessions, with FIIs investing a net Rs 34,584 crore over the past five trading sessions alone. The latest inflows mark a sharp turnaround from the prolonged selling witnessed earlier this year, when overseas investors withdrew billions of dollars from Indian equities.
The foreign buying came even as domestic institutional investors (DIIs) continued to sell. DIIs offloaded shares worth a net Rs 5,969 crore on Friday, following net sales of Rs 10,445 crore in the previous session. Their combined net selling over the two sessions stood at Rs 16,414 crore.
The return of foreign buying follows months of sustained selling amid elevated crude oil prices, geopolitical tensions in West Asia, a weakening rupee and concerns over corporate earnings.
Foreign selling intensified in September and October as oil prices climbed and global investors reduced their exposure to emerging markets. The outflows had pushed foreign ownership of Indian equities to historic lows.
Global brokerage Nomura said Indian equities could become more attractive to foreign investors as earnings improve and valuations remain below their post-pandemic averages. It also noted that the correction in artificial intelligence-related stocks in international markets could encourage investors to redirect capital towards other markets, including India.Expectations of a possible reduction in long-term capital gains tax for foreign investors have also added to optimism, although any such change remains uncertain.
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Sensex, Nifty climb higher
Indian equities defied a global sell-off on Friday, extending their winning streak as investors turned to domestic markets as a relative safe haven amid turmoil across global markets. The Nifty 50 surged 494 points, or 2.01%, to settle at 25,030, while the BSE Sensex advanced 1,718 points, or 2.17%, to close at 81,028.
The broader markets, however, came under pressure. The Nifty Smallcap 250 declined 0.85%, while the Nifty Midcap 100 ended marginally lower, signalling continued weakness beyond the benchmark indices.
Among sectoral indices, the Nifty Private Bank index led the gains, rallying more than 3%, while the Nifty Financial Services index advanced over 2.5%. The Nifty Consumer Durables index also gained around 2%.
Despite the sharp gains in benchmark indices, market volatility remained elevated. The India VIX, which gauges expected market volatility, surged more than 13% to trade near the 18 mark.
Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
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