FII Tracker: $4 billion-boost that took Sensex to all-time record high

NEW DELHI: With domestic institutional investors staying on the sidelines, foreign institutional investors or FIIs have been holding the fort on Dalal Street this month. Anticipating a slowdown in the pace of rate hikes by the US Federal Reserve, FIIs poured in $3.86 billion on the Street so far in November taking Sensex to a fresh all-time high of 62,447.73 on Friday.

A large part of the 1,547-point upside seen in Sensex so far this month is being attributed to the heavy FII inflow.

In the last one month, while the Nifty has rallied 4.9%, the mid and smallcap indices are up by less than 2% each as the FIIs are known to feast on largecaps. Led by financials, a bulk of FII buying has been concentrated in FMCG, IT and auto stocks.

On the other hand, FIIs have sold stocks in realty, telecom, textiles, power and consumer durables. Read more

“Some FIIs have in the past as well displayed a peculiar behaviour of entering the market when it is near the peak and exiting when it is near the bottom. It may not impact their portfolio much because the buying and selling is a small portion of their overall exposure. This time also we are seeing this pattern,” equity strategist Kranthi Bathini of Wealth Mills Securities said.


So far in the calendar year 2022, FIIs have been net buyers of Indian equities in only 3 months of July, August and November. The total FII outflow has been worth around $18.5 billion amid quantitative tightening and rate hikes by the US Fed.

Accelerating the outflow has been the sharp depreciation in the value of Indian rupee against the US dollar. The domestic currency has so far lost nearly 10% of its value against the greenback. However, the rupee has now been strengthening after hitting a record low of 83.29 as investors are favouring risk assets once more.

When FIIs were sellers earlier, DIIs were busy buying the dip as flow into equity mutual funds stood strong. “Now the market construct in the US has changed to rising equity, falling yields and falling dollar. This is favourable for the continuation of FII flows, going forward,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

FIIs are unlikely to be major sellers, going forward since their earlier policy of continuous selling in banking has cost them heavily, he said.

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