FIIs stayed net sellers for the fifth straight week, offloading Rs. 76.20bn
AHMEDABAD, 20 SEPTEMBER: Benchmark indices came under sharp selling pressure at the start of the week as Brent crude surged towards $109.90/bbl, bond yields rose, the INR weakened and geopolitical uncertainty intensified. Sentiment was further weighed down by a hawkish US Fed, which raised the policy rate by 25 bps to 3.75%–4.00%, its first hike since 2023, and signalled that more tightening may be needed as inflation stays elevated. The Bank of Japan also raised its policy rate by 25 bps to a 31-year high of 1.25% amid persistent inflationary pressures. Against this backdrop, the Nifty extended its losing streak to a sixth consecutive week. It slipped to an intra-week low of 23,116 on Tuesday before selling pressure eased, and the index recovered to close the truncated week at 23,346.40, down a marginal 0.22%. Bank Nifty remained under pressure, falling 0.44% on continued caution across the banking space. Broader markets saw profit booking, with the Nifty Midcap and Smallcap indices down 0.01% and 0.12%, respectively.
On the flows front, FIIs stayed net sellers for the fifth straight week, offloading Rs. 76.20bn. DIIs extended their buying streak with net purchases of Rs. 112.32bn, which helped the index recover from its mid-week lows. Month-to-date, FIIs have sold a net Rs. 70.41bn against DII net buying of Rs. 362.19bn, with the Nifty down 3.05% from its August-end close of 24,080.40. Over the past month, FIIs were net sellers in all five weeks while DIIs remained net buyers throughout, cushioning the Nifty’s slide from 24,154.90 to 23,346.40.
Going ahead, sustained FII selling and global headwinds are likely to keep markets volatile, though steady domestic institutional buying should continue to limit the downside. Market participants will closely track Brent crude prices, US-Iran geopolitical developments, and the upcoming US and domestic PMI data for cues on near-term direction.
– Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking
