FIIs net sell Rs 5,027 crore worth of Indian equities, DIIs net buy Rs 4,301 crore on Sep 24

Reports coming in for today mention that Foreign institutional market participants (FIIs) turned net sellers in Indian equities on Thursday, selling shares worth Rs 5,027.36 crore, while domestic institutional market participants (DIIs) bought equities worth Rs 4,301.18 crore, according to NSE data.

In September so far, FIIs have been net sellers in 12 out of 17 trading sessions. Their heaviest single-day sell-off came on September 24 (Rs 5,027 crore), while the largest single-day buy was Rs 6,688 crore on September 2.

FIIs bought shares worth Rs 13,111.22 crore and sold shares worth Rs 18,138.58 crore. DIIs bought shares worth Rs 18,196.90 crore and sold shares worth Rs 13,895.72 crore.

With Wednesday's selling, FII selling in September expanded to Rs 14,837.04 crore, while DII buying increased to Rs 49,778.66 crore.

On a year-to-date basis, FIIs have sold a net Rs 3,73,891.7 crore, while DIIs have bought Rs 6,13,283.22 crore, based on the NSE cash-market series. The monthly figures reflect the latest available revisions in the exchange-data series.

The Nifty 50 ended at 23,063.10, down 383.70 points or 1.64 percent, the sharpest signal day decline since July 8 when the index declined more than 2 percent, while the BSE Sensex plunged 1,247.71 points or 1.67 percent to 73,580.54, following spike in global bond yields and renewed buying interest in crude prices.

The broader market additionally witnessed sharp selling pressure, with Midcap 100 and Smallcap 100 indices declining 2.25 percent and 1.53 percent, respectively, while all sectoral indices ended in the red. The domestic volatility index spiked nearly 23 percent to 12.68, signalling a sharp gain in market risk aversion.

"Indian equities are likely to stay weak in the near term amid renewed uncertainty over a potential resolution of the US-Iran conflict, elevated crude prices and rising global bond yields," Siddhartha Khemka – Head of Research, Wealth Management at Motilal Oswal Financial Services stated.

Hopes of a near-term resolution remained subdued after US President Donald Trump indicated that a potential deal with Iran could come only after the November US midterm elections, while renewed Houthi activity in the Red Sea and tensions involving Saudi Arabia have heightened global supply risks and inflationary pressures.

Banks and financials declined around 2 percent after IRDAI (Insurance Regulatory and Development Authority) proposed tighter insurance commission caps, softer expense limits and restrictions on compulsory insurance bundling with loans. The proposals could pressure insurance distribution income for banks, NBFCs and distributors.

Brent oil futures rose 3.25 percent to around $106.6 a barrel (at the time of writing this article), amid renewed uncertainty over US-Iran diplomatic ties, adding to inflation concerns. The US 10-year Treasury yield surged to around 5.15 percent, its highest level since June 2007.

Key global cues to watch include US Jobless claims due later today and BoJ CPI due tomorrow.

Developments in West Asia, movements in Brent crude, foreign flows and global cues will stay key near-term drivers.