Indian Equities See Major Shift: DIIs Join FIIs as Net Sellers After a Month

A notable shift has occurred in the Indian equity markets, with Domestic Institutional Investors (DIIs) turning net sellers after a month-long spree of buying. This change in sentiment saw DIIs offloading Indian equities worth Rs 328.79 crore on May 7, coinciding with Foreign Institutional Investors (FIIs) continuing their robust selling trend, with net sales amounting to Rs 1,622.75 crore.

This combined institutional selling contributed to a cautious mood across the bourses, as both benchmark indices concluded the trading session in negative territory.

The BSE Sensex witnessed a decline of 0.58 percent, while the Nifty 50 shed 0.51 percent, reflecting the impact of these capital outflows.

For DIIs, this marks a significant pivot. They had been unwavering net buyers throughout the entire month of April, injecting a substantial Rs 16,608.23 crore into Indian equities.

Their consistent support had often provided a counterbalance to the persistent selling pressure exerted by FIIs.

In contrast, FIIs have been more consistent in their selling stance. April saw them offload a considerable Rs 35,692.01 crore. Looking at the broader picture for 2024, FIIs have been net sellers to the tune of a staggering Rs 1,44,792.20 crore.

This prolonged divestment by foreign investors highlights a continuous cautious approach towards the Indian market, despite DIIs' efforts to absorb some of this selling pressure, having bought a net Rs 2,52,563.85 crore year-to-date.

On May 7, the market performance underscored the broader sentiment.

The 30-share BSE Sensex closed at 73,006.31, marking a fall of 453.85 points. Similarly, the Nifty 50 slipped 123.30 points to settle at 22,205.70. Sectorally, IT, pharma, and consumer durables were among the segments that saw declines, indicating a preference shift among investors. Conversely, sectors such as banking, financial services, auto, and realty managed to end the day with gains, showcasing some resilience amidst the broader market weakness.

Among the Nifty 50 constituents, top gainers included SBI Life Insurance, Eicher Motors, Divi's Lab, Shriram Finance, and Mahindra & Mahindra, which defied the overall market trend.

However, heavyweights like L&T, Tech Mahindra, Apollo Hospitals, TCS, and IndusInd Bank were among the prominent losers, reflecting the profit-booking and cautious sentiment prevalent in the market.

The latest trading session indicates a crucial juncture for Indian equities. With DIIs joining FIIs on the selling side, albeit with a smaller quantum, market participants will be closely watching for sustained trends and their potential implications on the trajectory of the Indian stock market in the coming days.