“FIIs may again turn sellers in some of the coming days. But they are unlikely to sell aggressively because their selling is not having any impact on the market, which is setting new record highs. FIIs will have to buy the same shares, which they are selling now, at higher prices when the situation turns favourable for FII buying. Therefore, even if they sell in the coming days, that will be subdued selling,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
In recent months, the increasing dominance of mutual funds, HNIs and retail investors has made FII action less impactful on Dalal Street.
“FPIs are steadily increasing their buying in debt. They have bought debt to the tune of Rs 2,2419 crore in February on top of the Rs 19,836 crore they bought in January. This trend of steady debt investment is likely to continue,” Vijayakumar said.
On the first trading day of March, FIIs were net buyers to the tune of Rs 3,800 crore, according to provisional market data.
If we look at the historical trends of FII and DII inflows in March, then DIIs were net sellers of shares on six occasions in the last 12 years. Meanwhile, FIIs have been net buyers on 10 occasions. February month derivative rollover data shows that in Index Futures, FIIs decreased their net shorts (-58.9k current expiry Vs -108k previous expiry).FIIs’ index futures long/short ratio improved from lower levels, though they remained net sellers on index futures throughout the month.
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