FIIs Take U-Turn, Pump Rs 18,280 Crore Into Indian Stocks In Just 5 Days – Does This Signal A Recovery?

Foreign Institutional Investors (FIIs) have made a strong comeback in the Indian stock market. After eight days of relentless selling, FIIs took a sharp U-turn, pumping in Rs 18,281.5 crore over the past five consecutive trading days, data from National Securities Depository Ltd (NSDL) showed. 

From their selling streak, which saw a total outflow of Rs 34,304.41 crore, FIIs bought equities worth Rs 6,278.77 crore on April 16. The buying spree continued with Rs 4,026.02 crore on April 17, Rs 436 crore on April 21, Rs 1,723.25 crore on April 22, and Rs 1,937.06 crore on April 23. So far in April, FIIs have sold Rs 15,071 worth of equities, and on a year-to-date (YTD) basis, the FII outflow has been Rs 1,31,645 crore.

Amid this, the domestic stock market also saw a sharp revival. The benchmark indices Sensex and Nifty 50 surged 12.16 per cent and 11.9 per cent, respectively, from their recent lows, over the past 10 trading days.

Shriram Group's stockbroking arm Way2Wealth noted, "The Trump administration signalled progress on trade agreements with India and Japan, while also acknowledging that the ongoing impasse with China cannot continue indefinitely. Further easing investor concerns, President Trump stated he has no intention of dismissing Federal Reserve Chair Jerome Powell, helping to reassure markets about the independence of US monetary policy."

International brokerage firm Morgan Stanley noted in its last week's India Strategy report, "India's low beta is helping it to significantly outperform amid the global selloff, even while the index could reach multi-month lows. Key India-specific catalysts include continuing dovish actions from the Reserve Bank of India (RBI), stimulus through GST rate cuts, a trade deal with the US, and incoming growth data."

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said India appears relatively resilient in the face of global economic uncertainty, adding that it is the only large economy that can grow at 6 per cent even amid a slowdown in global economy. Vijayakumar added, along with this, a declining dollar has the potential to attract more FII inflows into India in the near term.