FII Sell-Off Ends As Indian Economy Stays Resilient

Foreign Institutional Investors (FIIs) have reversed their selling trend, turning buyers in December as the Indian economy continues to show resilience amid global uncertainties. Market experts say the stage of relentless FII selling is now over.

According to data from the National Securities Depository Limited (NSDL), FIIs have invested Rs 24,453 crore in Indian markets this month (up to December 6). Of this, Rs 17,921 crore went into equity through exchanges, with the remainder directed into the primary market.

This shift in strategy marks a dramatic turnaround from the previous two months, where FIIs were net sellers. In October, their selling totaled Rs 113,858 crore, which dropped to Rs 39,315 crore in November.

Siddhartha Khemka of Motilal Oswal Financial Services Ltd noted that FIIs’ return in December has boosted market sentiment. “We expect the Nifty to maintain a gradual uptrend next week, supported by liquidity from the RBI’s CRR cut, positive government policy news, and ongoing FII inflows,” he said.

Also Read: Indian Stock Market Holds Positive Outlook Amid FII Inflows And Economic Recovery Signs

This change in FII behavior is reflected in the stock market, especially in large-cap banking stocks, where FIIs had previously been sellers. Experts believe there is still room for growth in this segment, given its reasonable valuation and steady pace of growth.

The shift comes as a relief after two months of heavy FII selling. Despite this, domestic institutional investors (DIIs) kept the market stable with strong inflows.

Additionally, India’s forex reserves saw a modest rise of $1.51 billion, reaching $658.091 billion for the week ending November 29. Foreign currency assets, a key component of these reserves, increased by $2.061 billion to $568.852 billion, according to the latest data from the RBI.