Foreign institutional investors (FIIs) recorded net outflows of Rs 31,114 crore this week, while domestic institutional investors (DIIs) countered this by investing Rs 33,933 crore. This dynamic has helped Indian markets avoid significant corrections despite global uncertainties.
Throughout the week, FIIs consistently sold off, whereas DIIs maintained their buying streak. FII ownership of Indian equities dropped from 20.2% in May 2016 to 14.4% in May 2026, while DII ownership increased to 18.7% by March 2026.
Amid escalating geopolitical tensions impacting global markets, Indian benchmark indices showed a corrective bias. Factors like Iran’s nuclear ambitions, FII outflows, and high oil prices influenced market sentiment. The RBI kept the repo rate steady at 5.25% during this period.
Investor confidence received a boost as the government exempted Foreign Institutional Investors from capital gains tax on interest earned from government securities. Nifty experienced fluctuations but closed the week around 23350 levels, down by 0.8%.
Looking ahead, analysts highlight the importance of monitoring domestic inflows’ sustainability and any potential slowdown in FII selling as critical factors for the market’s trajectory.
