DIIs selling trend contrarian to FIIs buying in cash market! Anil Singhvi decodes for investors
Foreign Institutional Investors (FIIs) have been on a buying spree in the cash markets over the last three trading sessions. FIIs have bought shares worth Rs 5400 over the last three trading sessions - and Rs 2000 cr on Wednesday. Meanwhile, the Domestic Institutional Investors (DIIs) have taken a contrarian position selling shares worth Rs 10,000 cr over the last 8 trading sessions
Foreign Institutional Investors (FIIs) have been on a buying spree in the cash markets over the last three trading sessions. FIIs have bought shares worth Rs 5400 over the last three trading sessions – and Rs 2000 cr on Wednesday. Meanwhile, the Domestic Institutional Investors (DIIs) have taken a contrarian position selling shares worth Rs 10,000 cr over the last 8 trading sessions. What this means for the Indian Markets and how should the investors see this event? Zee Business Managing Editor Anil Singhvi has an insightful take on this.
This is an indication that the interim period is not looking conducive to domestic investors. The markets have been running on full steam and have shown as if there has not been any real onslaught from the Coronavirus pandemic. The Nifty is just shy of its lifetime high of 12,400.
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The local funds could be of the view that the Indian and global markets have had a free run, much more than what should have been the case.
Under the current circumstances, it is advisable to book profits and take some breather, the Market Guru said. Earlier, when the markets were falling, it was primarily on the back of FII selling. The DIIs were buying during those times.
Supporting the stance taken by the DIIs, Singhvi said that the move to book profits is a welcome one and could be with the intention to preserve some cash and look for new opportunities at lower levels. If the entry were made at right levels, then making profit is a right strategy now, he further said.
The DIIs are thinking that the markets would give some correction, going forward.
It should also be noted that the net inflow of domestic investors is negative over the last 3 months. This means that no big money is chasing the markets on the domestic front.
The FIIs however believe that the current positive momentum in the US Market holds them in good stead and they need not worry till that is present.
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Both views are correct in their own ways, he further said.
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