Amid ongoing foreign outflows, domestic institutional investors (DIIs) stepped in as net buyers, injecting Rs 26,897 crore into the market last week. This helped stabilize key support levels, shielding against the selling pressure from Foreign Institutional Investors (FIIs). Analysts noted that despite FIIs consistently selling off, DIIs’ strong participation has provided crucial support.
Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealthtech firm, highlighted that FIIs continued as net sellers, with outflows totaling around Rs 24,596 crore due to global uncertainties, rising bond yields, and a stronger US dollar. The market sentiment, influenced by global and macroeconomic challenges, remains subdued even with DIIs countering FII outflows.
As of March 27, FIIs intensified their selling in Indian equities, resulting in a month-to-date outflow surpassing Rs 1.13 lakh crore. This was primarily driven by tensions in West Asia and high oil prices. Vinit Bolinjkar, Head of Research at Ventura, pointed out that DIIs’ substantial net buying of over Rs 25,000 crore weekly helped mitigate the market decline.
Looking ahead, analysts anticipate a cautious near-term outlook with expectations of range-bound trading and elevated volatility index until global risk sentiment improves. Bolinjkar emphasized that robust domestic flows and any easing of geopolitical tensions could limit downside risks, favoring quality large-caps and domestic themes over high-beta plays.
The Indian equity benchmarks closed lower for the fifth consecutive week due to persistent geopolitical tensions, high crude oil prices, and sustained foreign outflows. Nifty fell by 1.28% during the week and dropped by 2.09% on the last trading day to settle at 22,819. Meanwhile, Sensex declined by 1,690 points or 2.25% to 73,583, with a weekly decrease of 1.27%.
Throughout the week, both indices experienced volatility and pressure, although they made intermittent recovery attempts amid the challenging market conditions.
