The equity benchmarks have traded in a range this November, with the Nifty moving between 19,000 and 20,000. While foreign institutional investors have been indecisive, domestic investors have maintained their faith in Indian shares, offsetting selling by FIIs.
The first half of November saw foreign investor net sold Rs 1,416 crore worth of equities, as they dumped auto, banks and financials and power sector stocks. They bought healthcare and consumer services.
FIIs net sold Rs 1,722 crore worth of auto and auto component maker stocks from November 1-15 but other market participants continued to buy, as the Nifty Auto has maintained its winning run in the last one month, zooming 7 percent.
Auto stocks have gained amid festival buying, new launches and increasing demand for electric vehicles.
Banking and financial services, which have the biggest weight in the Nifty and the Sensex, were also among the most sold stocks. FIIs offloaded equities worth Rs 1,566 crore, putting pressure on Nifty Bank and Nifty Financial Services indices, both of which have been largely flat in November.
However, the trend may change, analysts said. “FPIs are likely to buy banking, which they have been selling during the last three months. A large-cap led rally is likely in the market, going forward,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Power, information technology (IT) and fast-moving consumer goods (FMCG) were also the sectors where FIIs sold equities worth more than Rs 1,000 crore each in the first half of November.
Thanks to the large weight of IT and banking sectors in Nifty and Sensex, sustained selling in these sectors also keeps headline indices in check. The Nifty rose about 3 percent during the November 1-15 period and has plateaued since.
Healthcare saw FII buying shares worth more than Rs 1,000 crore. Consumer services and realty were in demand too in the first half of the month.
In terms of percentage of assets under custody (AUC), the value of stocks and debt owned by FIIs in each sector, utilities saw the highest selling. FIIs dumped 3.3 percent of total worth of these securities they owned. This was followed by media and entertainment and forest materials at 1 percent and 0.76 percent.
In the last few sessions, FIIs have started buying again. On November 24, they bought a net Rs 2,625 crore worth of shares, NSE data shows.
“There are some important developments that might influence FPI inflows into India. The better-than-expected decline in inflation in the US has given the market confidence to assume that the Fed is done with rate hike. Consequently, the US bond yields have declined sharply with the 10-year benchmark bond yield correcting from 5 percent in mid-October to 4.4 percent now. This has forced the FIIs to slow down their selling,” Vijaykumar said. Moneycontrol