Due to the war between Iran and Israel and rising prices of crude oil, foreign investors are staying away from the Indian stock market. According to provisional exchange data, foreign investors (FIIs/FPIs) sold Indian shares worth Rs 6030 crore on March 6. However, the fortunate thing was that during this period, domestic investors (DIIs) supported the market by buying shares worth about Rs 6972 crore.
During the trading session on Friday, the last trading day of the week, FIIs bought shares worth Rs 14435 crore, but sold shares worth Rs 20465 crore. Meanwhile, DIIs bought shares worth a total of Rs 19662 crore and sold shares worth Rs 12691 crore. So far this year, foreign investors have sold shares worth Rs 60,364 crore, while DIIs have bought shares worth Rs 1,28,348 crore.
stock market under pressure
Oil prices have reached a 23-month high due to supply concerns amid rising tensions in the Middle East. There is also fear regarding inflation. These concerns reversed all the previous day’s gains in the market on March 6. Due to this, the benchmark indices remained under pressure throughout the session.
Nifty 50 index fell 315 points (1.27 percent) to 24450 and BSE Sensex fell 1097 points (1.37 percent) to 78919. During this period, selling was seen in all sectors except IT. However, the broader market outperformed the benchmarks as the Nifty Midcap and Smallcap 100 indices fell 0.69 per cent and 0.24 per cent respectively.
This is also a challenge for the stock market
Vinod Nair, Head of Research, Geojit Investments, said, “Continued rise in oil prices could impact investor sentiment and adversely impact India’s twin deficits, inflation trajectory and RBI’s monetary stance. He said the rise in US 10-year bond yields and a strong dollar have prompted FIIs to adopt a risk-averse approach to domestic equities.
In fact, when bond yields increase in America, foreign investors start getting better returns there without any risk. In such a situation, they consider it better to withdraw money from risky assets like the Indian stock market and invest it in American bond yields. This is the reason why the rise in US 10-year bond yield and strong dollar index has always been challenging for emerging markets like India.
