FIIs Exodus Triggers Nifty’s Longest Weekly Fall Amid Shift to China’s Stimulus-Driven Recovery | NSE & BSE Update

Foreign Institutional Investors (FIIs) have caused the Nifty index to post its longest weekly losing streak of the year, despite breaking a three-day losing run on Friday. FIIs have been selling Indian shares as they turn to China, seeking gains from the country’s stimulus-driven recovery.

The Nifty closed down for the third week in a row, falling by 0.44% to 24,854.05. However, it did manage to rise by 0.4% on Friday, recovering from oversold positions. This recovery was mainly led by banks like ICICI Bank, Axis Bank, and HDFC Bank, which had experienced heavy FII selling earlier in the month.

Retail Investor Confidence is Weakening

According to market expert Ambareesh Baliga, FIIs are continuing to sell, and retail investors are not as confident as they were a few months ago. This uncertainty is leading to ups and downs in the market. Retail investors, especially those who were heavily invested in sectors like railways, defence, and public sector units (PSUs), have been selling their positions, contributing to market volatility.

FIIs Continue to Sell Shares

FIIs continued to sell shares, with a provisional outflow of ₹5,485.70 crore on Friday, while Domestic Institutional Investors (DIIs) bought shares worth ₹5,214.83 crore. So far, FIIs have sold a record ₹83,186.7 crore worth of shares this month.

Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, expects the market to remain in a consolidation phase due to mixed global signals and a lack of domestic triggers. However, he also noted that individual stock movements will likely be influenced by quarterly earnings reports.

Underwhelming Earnings

The earnings season has been underwhelming, with overall profits, including those of banks and non-banking financial companies (NBFCs), growing by just 2.86% compared to last year. This slow earnings growth, combined with heavy FII selling, has contributed to a negative market sentiment.

Call Options Indicate Market Uncertainty

Rohit Srivastava from IndiaCharts pointed out that the value of call options (bets that the market will rise) has exceeded that of put options (bets that the market will fall) by a record ₹6.12 trillion. This suggests that traders are betting that the market won’t rise and are hoping to profit from selling these call options. Despite this, Srivastava believes that any market rise could be met with more selling from FIIs and retail investors.

FIIs Reduce Equity Holdings

In conclusion, FIIs have sold ₹66,301 crore worth of shares in the first half of October, bringing their total equity holdings to ₹75.65 trillion. Experts predict that the market will likely remain within a range of 24,600 to 25,600 in the medium term, with support and resistance levels being tested periodically.