A sudden spike in the US bond yields this week has led to a sell-off in equity assets globally. In India, the Sensex and Nifty fell over 3 per cent. During the week, the Sensex has declined by 2,500 points and Nifty by around 750 points.

On Thursday, the Sensex closed at 49,216 after dropping 585 points, or 1.17 per cent. The Nifty closed at 14,557 down 163 points or 1.11 per cent. Provisional buying and selling data from the exchanges show that domestic selling dragged the markets. Rising Covid-19 cases has also depressed sentiments.

FPIs on buying spree

Interestingly, in the past three trading sessions foreign portfolio investors have been net buyers of stocks in the cash segment with net purchases of ₹1,692 crore on March 16, ₹2,625 crore on March 17 and ₹1,258 crore on March 18. On these three days together, domestic institutional investors (DIIs) sold stocks worth ₹2,846 crore in the cash segment.

Though markets have remained in a range the entire month, FPIs have been net buyers of stocks worth ₹7,802 crore in the cash segment while the DIIs have sold stocks worth nearly ₹5,000 crore.

Similarly, even in the index derivatives segment, FPIs have been net buyers of contracts worth ₹1,194 crore during March and net sellers for only ₹201 crore in the stock futures.

Overall, this indicates that the selling pressure on the markets is not from FPIs but domestic institutions and retail and high net worth individuals and propriety traders. The situation was similar during March and April 2020, experts said. Post these two months last year, the markets witnessed a sharp rally.

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