FIIs firmly back in India; send stock market soaring

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By Our Special Correspondent

New Delhi, August 30: On Monday when the Indian equity market bled, with indices deep diving, the foreign institutional investors stood firm, and actually recorded a net buy of Rs 144 crores. On Tuesday, the FIIs came roaring into the Indian equity market, pumping a net Rs 4156.86 crores.

When the FIIs join the party, there is no looking back on the equity market. The BSE jumped by 1564 points and the NSE recorded a gain of 446 points.

The private banking stocks have emerged as clear favourites of the FIIs, as they pumped the likes of the IndusInd Bank, Kotak Mahindra Bank, HDFC Bank to clock super gains by the time indices closed for the day.

After heavy selling the Indian equity market for over 18 months, the FIIs appear to have run tired having oversold India.

The US Fed continues to keep the investors on the tenterhooks, with conflicting commentaries giving wild swings to the equity market globally.

Yet, India has not been much affected on account of the retail investors not losing their zeal to make money from the stock market while their savings options with the banks and post-offices appear to be net negative when adjusted with the prevailing inflation.

This is evident from the fact that on an average 26 lakh Demat accounts are being opened in the country (2021-22, while 12 lakh of them were being opened in the last fiscal. That has been a significant jump from a mere four lakh Demat accounts opened in 2019-20.

The FIIs seem to be taking confidence from the depth of the Indian retail investors to return to India after withdrawing almost Rs 2.75 lakh crores during their selling spree in the 18 months period.

In August, FIIs had a net sell in excess of Rs 1000 crores only once on 19th when they dumped equities worth Rs 1633.21 crores.

The FIIs have been a net buyer into the Indian equity market only for five days in August, 2022.

While the FIIs had a net sell of Rs 6411.91 crores till Monday, their Tuesday action alone with a net buy of Rs 4156.86 crores could signal a significant turnaround.

Indeed, the stock markets globally are having short phases of bull and bear run, and no conclusive investment meaning could be brought from the actions of the FIIs.

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