Stock markets are now FII resilient; DIIs ride bulls
By S Jha
New Delhi, December 31: Rupee was the worst performing currency in Asia in 2022, shedding almost 10 per cent. The Indian stock markets in contrast remained bullish this year despite the global meltdown on account of the Russia-Ukraine War and the runaway inflation.
It may be early day but signs are visible that the Indian stock markets may be on the verge of gaining atmanirbharta (self-reliance). Something of this sort has been seen in the Indian agriculture, which became Monsoon resilient a few years ago. The vagaries of Monsoon no more affect the agrarian outputs in the country. The foodgrain productions continue to rise even while the visible effects of the climate change are seen in many parts of the country.
The foreign institutional investors (FIIs) dictated the direction of the Indian stock markets for decades. With a few million dollars, they could either send the stock markets crashing or soaring to make quick gains. But that appears to be an old story.
In the month of December, the FIIs positively contributed to the Indian equities only on five trading sessions. On six days in December, the FIIs sold equities more than Rs 1000 crores. For the month, the FIIs accounted for net selling equities worth Rs 14231 crores. The FIIs were bearish on the Indian equities for the whole month. Yet, Sensex and Nifty fell only by about three per cent in the month, and the loss of the Bank Nifty was even lesser.
The domestic institutional investors (DIIs) riding on the swelling corpus of the savings of the people were extra bullish in the Indian equities. The DIIs accounted for a net sell in the Indian equities only for one day in whole of December. The DIIs poured a net of 24,159 crores in the Indian stock markets in December. Thus, the DIIs not only neutralized the bearish FIIs, but also provided stability to the indices.
The mutual fund houses are reporting healthy flow of deposits by the retail investors through the SIP (systematic investment plan) mode. The insurance companies are aggressive in selling the unit linked policies, showing healthy CAGR of the last 15 years of their portfolio. The lack of avenues for the small savings, as the people seek opportunities to beat inflation on their return from the deposits has given a deep anchor to the Indian equity market, which could be a sign of maturing, as India still lags behind the US in the people’s participation in the equity market.
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