In the Indian stock market, domestic investors are making their presence felt more than ever before, with institutional and retail investors showing a strong influence. On the other hand, foreign investors have been selling off shares in large quantities, making October the highest-selling month for them this year. Within a span of 12 days, foreign investors have already offloaded equities worth Rs 58,711 crore, with the most substantial selling seen in the week of 7th October to 11th October, amounting to Rs 31,568.03 crore.
During times of extreme market volatility, Foreign Portfolio Investors (FPIs) have been aggressively selling off their stakes. Between September 30th and October 4th alone, FPIs sold shares worth around Rs 27,142.17 crore, with the biggest selling seen on October 4th, totaling Rs 15,506 crore. However, domestic investors, particularly mutual funds, have been counterbalancing this trend with strong buying. Mutual funds have been net buyers at Rs 57,792.20 crore in October, while other categories of domestic investors have also shown confidence by picking up shares worth around Rs 11,633 crore during this period.
Even insurance companies, banks, and Portfolio Management Services (PMS) have joined the buying spree, with net purchases amounting to Rs 1,859 crore, Rs 723 crore, and Rs 169 crore respectively. This strong support from domestic investors has allowed market experts to remain positive about the stability of the Indian market, reducing the country’s dependence on FPIs over time. Despite various challenges like the rise in US core inflation and ongoing geopolitical issues, experts believe that the Indian market has a solid foundation due to the strong backing of domestic investors.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that the market has been trading sideways due to the lack of fresh triggers for decisive momentum. The increase in the US 10-year yield and caution ahead of the earnings season have added layers of sentiment to the market. With FIIs focusing their attention on more affordable markets due to geopolitical challenges, there has been an impact on domestic market liquidity. However, the unwavering support from domestic investors is seen as a positive sign for the resilience of the Indian market in the face of external pressures.
