Domestic institutional investors (DIIs) have been the saviours of India’s stock market in January so far while foreign portfolio investors (FPIs) have continued their selling spree ahead of much anticipated Budget announcement on February 1. Sensex and Nifty are just around 2 per cent away from hitting their new lifetime highs.
Per stock exchange data, FPIs have sold index futures worth ₹1,621 crore and stock futures worth ₹3,361 crore so far this month. In the cash segment, FPIs have made net purchases only worth ₹68 crore as per exchange data. All this selling has been absorbed by DIIs with their net purchases worth ₹5,485 crore in the cash markets, data showed. On Wednesday, the Sensex rose by 0.88 per cent or 533 points to close at 61,150. The Nifty index rose by 0.87 per cent or 156 points to close at 18,212. On Wednesday too FPIs were net sellers to the tune of ₹1,001 crore in the cash segment as per provisional data. Markets rose despite this selling as DIIs countered it with net purchases of stocks worth ₹1,332 crore in cash segment. In derivatives, FPIs were net sellers of index futures worth ₹142 crore and net buyers of stock futures worth ₹584 crore.
SIP flows continue
Experts say the scope for FPIs to sell further has narrowed while DIIs can easily continue their purchases of stocks as there has been a steady flow of money via systematic investment plan by retail investors into mutual fund schemes. It is one of the key reasons that stock markets may not witness any sharp fall ahead of the Budget if the US and other global markets remain buoyant.
Fed in control
Global markets rallied on Wednesday as US Federal Reserve chair Jerome Powell’s remarks on Tuesday seemed to imply that the Fed was in control of the economic situation. Omicron seems no worry for the markets since no country was announcing any lockdowns. “The short-term trend of Nifty continues to be positive. There is a possibility of Nifty reaching another crucial resistance of around 18,340 and 18,600 levels in the next one week. The formation of an unfilled opening upside gap of Wednesday could hint at another 1-2 such upside gaps in the short term. Immediate support is placed at 18,090 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.