Mumbai, May 30 (IANS). Domestic institutional investors (DIIs) invested a record Rs 82,668 crore in May, providing strong support to the Indian stock market. On the other hand, foreign institutional investors (FIIs) continued selling.
This huge investment by domestic investors largely balanced the impact of the 11-month long selling by foreign investors. FIIs sold shares worth a total of Rs 55,963 crore during May, but strong investment by DIIs maintained liquidity in the market.
This tussle among investors during the month was clearly visible in the trading of the last week.
Pabitro Mukherjee, deputy vice president (technical), Bajaj Broking, said, “FIIs continued their selling and sold shares worth a net Rs 23,734 crore in four trading sessions. DIIs, playing the role of the biggest supporter of the market, bought Rs 25,503 crore. The special thing is that DIIs made continuous purchases every day throughout the week.”
According to analysts, the main reason for this large-scale withdrawal of foreign investors is the increasing geopolitical tension in West Asia, which has increased uncertainty and risk aversion at the global level.
Apart from this, several macroeconomic pressures like weak rupee and high crude oil prices have also increased the concern of foreign investors.
However, the Indian stock market faced a relatively stable but eventful week. The easing of tensions in West Asia and the sharp fall in crude oil prices restored investor confidence to some extent and increased risk appetite.
Analysts say rising expectations regarding a possible agreement between the US and Iran have reduced fears of disruption in energy supplies, leading to a positive environment in global financial markets.
Despite this, FIIs remained cautious throughout the week and remained net sellers most of the time.
At the same time, DIIs continued to work to provide stability to the market.
Ponmudi R, CEO, Enrich Money, said strong participation by domestic investors absorbed the bulk of the selling by foreign investors and prevented much of the fall in the benchmark indices.
According to market experts, the trend of institutional investment in the coming month will depend on key factors like the status of US-Iran tension, direction of crude oil prices, monetary policy decisions of the Reserve Bank of India and progress of monsoon.
–IANS
DBP
