Market Overview

Domestic Institutions Ditch Stocks What Does it Mean for the Market?

stocks market

In the last two trading sessions, domestic institutional investors (DIIs) have sold shares/Stocks worth Rs 5,316 crore in Market says V.K. Vijayakumar Chief Investment Strategist at Geojit Financial Services Market.

A consolidation phase is likely to follow the recent surge that took benchmark indices to new highs, he said.

Since core inflation remains sticky around 5 percent, the US Federal Reserve is likely to raise rates by 25bp on July 26 based on the latest US non-farm employment data (2.09 lakh jobs created in June).

Bond yields have moved up anticipating this, with the 10-year yield exceeding 4%.

As a result of this macro construct, the ongoing rally in the mother stock Market will be restrained, and this will have an effect on the Indian market as well.

Moreover, DIIs have sold Rs 5,316 crores value stocks in the Market cumulatively during the last two trading sessions.

As India continues to be a favorite destination for FIIs, the Market is likely to move into a consolidation phase at lower levels.

Due to good Q1 results and reasonable valuations, financials will support the market during dips.

According to Vijayakumar, the flood of FPI flows into India continues with Rs 21,943 crore of inflows (including bulk deals) up to July 8.

He added that if this trend continues, FPI flows in July will surpass those in May and June, which were Rs 43,838 crore and Rs 47,148 crore, respectively.

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