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The ongoing <keyword id="20168812" type="General" weightage="20" keywordseo="sell-off" source="keywords">sell-off</keyword> by <keyword id="19900795" type="General" weightage="20" keywordseo="foreign-investors" source="keywords">foreign investors</keyword> continues to loom large on <keyword id="19991358" type="General" weightage="20" keywordseo="Indian-markets" source="keywords">Indian markets</keyword>. In October so far, <keyword id="19950996" type="General" weightage="100" keywordseo="FIIs" source="keywords">FIIs</keyword> (foreign institutional investors) have already withdrawn Rs 74,732.20 crores. Not for a single day this month have FIIs poured money into <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>. The sell-off started on October 1, when foreign investors withdrew Rs 5,579.35 crore. The highest withdrawal of this month came on October 3. 2024, when FIIs sold Rs 15,243.27 crore worth of assets. Yesterday, i.e. on October 17th, FIIs pulled out Rs 7,421.40 crore from the markets. Experts state that FIIs are continuously putting pressure on Indian stocks, but the situation is expected to improve in the coming weeks with a sharp recovery anticipated. "We remain optimistic as the FII selling may have crossed the half way mark already and as it tones down, the domestic flows will help a recovery. When the recovery happens it will sharp and concentrated, giving long term investors motivation to stay put during the harrowing volatility of a roller coaster market that has repeatedly tested support levels but remains oversold, hence ripe for a bounce sometime in the next few weeks" said Ajay Bagga, Banking and Market Expert to ANI. Between January and October 2024, foreign investors have invested a net of 1,87,298 crore in India. This year, apart from the current sell-off, January, April and May also saw <keyword id="23593694" type="General" weightage="20" keywordseo="investment-outflows" source="keywords">investment outflows</keyword> by FIIs. The intense selloff comes right after September, when foreign investors invested a record Rs 93,538 crore in the Indian markets. June, July and August 2024 had also seen positive inflows from foreign investors of about Rs 41,757 crore, Rs 48,796 crore and Rs 25,493 crore respectively. However, a resilient, strong domestic investor base is keeping Indian markets afloat. <keyword id="21714171" type="General" weightage="20" keywordseo="DIIs" source="keywords">DIIs</keyword> (domestic institutional investors) have been consistent buyers throughout this month, largely balancing the outflows prompted by FIIs. In October so far, DIIs have invested about Rs 68,961.37 crore in the market, with the highest monthly inflow coming in on October 7th. While DIIs invested Rs 13,245.12 crore in Indian markets on that day, foreign investors withdrew Rs 8,293.41 crore. Yesterday i.e. on October 17, 2024, DIIs invested Rs 4,979.83 crore in the markets. At present, experts note that DIIs are flush with cash at the moment, with <keyword id="20052797" type="General" weightage="20" keywordseo="mutual-fund-inflows" source="keywords">mutual fund inflows</keyword> reaching an all-time high of Rs 24,509 crore in September 2024, a record 52.78% jump from the corresponding year ago period, where they stood at Rs 16,042 crore. Generally, keeping around 3-5% of their assets in cash is considered an acceptable practice amongst mutual fund houses. As per reports, mutual funds are currently in possession of Rs 1.86 lakh crore worth of cash, which constitutes 5.03% of their total AUM as of September 2024.

Exodus of foreign investors from Indian markets continues unabated in October. But DIIs are holding the fort steady

<ul><li>Ten years ago markets were completely driven by FPIs but today the situation has changed, says <keyword id="5500681" type="General" weightage="80" keywordseo="v-s-sundaresan" source="Orion">V S Sundaresan</keyword>, executive director at SEBI. </li><li>The SEBI director believes that <keyword id="6416579" type="General" weightage="20" keywordseo="retail-investors" source="Orion">retail investors</keyword> are confident in Indian markets and enough to hold the markets strong despite <keyword id="16607640" type="General" weightage="20" keywordseo="fii-exits" source="Orion">FII exits</keyword>. </li><li>Lack of investor awareness, regulatory overreach and litigant mindset are weaknesses in our markets, said the SEBI official. </li></ul>A sell off by foreign institutional investors (FIIs) no longer impacts Indian equity markets like it used to a decade ago, said V S Sundaresan, executive director at Securities and Exchange Board of India (SEBI). He says that retail participation has become more important in the home market. “Ten years back, markets were completely driven by FPIs but today the situation has changed. Nobody is bothered if FPIs are putting or pulling money. It does not affect the market in any way and they are only now for headlines,” said Sundaresan at 14th Capital Market Summit on Wednesday. FII exits have been making headlines especially since December last year, while impacting markets and inducing volatility. In January, FIIs sold Indian equities worth ₹41,464 crore and in February, so far, they have sold ₹1,041 crore equities. As a result, Sensex has dropped over 2%, and Indian markets have been underperforming compared to others in China and Hong Kong. Retail participation balances flows in the home markets The SEBI director believes that retail investors are confident in Indian markets, and that’s enough to hold the markets strong despite FII exits. “Participation by retail investors has given fillip to this market that can do with or without FPIs. We should be proud of this. This clearly shows there is a good progressing capital formation. This is definitely proving that the savings potential of India is being channeled into capital markets. Capital markets are having enough support from non-FPIs so that markets are balanced,” added Sundaresan. He added that Indian markets are stable with considerably lower volatility compared to other markets. “Despite economic slowdown, increasing interest rates, we have a resilient market,” he said. He added that there is a lack of investor awareness, as new investors are incurring hefty losses in derivatives markets. “Data shows that 9 out of 10 are losing money in options in F&amp;O markets as everybody thinks they can play in options markets. There is a lot of scope for investor education,” said Sundaresan. Regulatory overreach, rising litigations are market weaknesses Lack of investor awareness, regulatory overreach and litigant mindset are weaknesses in our markets, said the SEBI official. The cost of compliance has increased substantially with non-compliances leading to a rise in the number of litigations. For which, he says there is a need to increase self governance. He cited the example of the government’s AGR (adjusted gross revenue) based revenue sharing model with the telecom players wherein the companies are unable to pay the dues, which eventually increases government’s stake. The government recently converted the interest on AGR dues that <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-shares-hit-25-upper-circuit-after-govt-agrees-to-convert-16133-cr-dues-into-equity/articleshow/97643006.cms">Vodafone owes, into equity</a>. Instead of litigations he said there should be self corrective measures wherein disputes can go for settlements instead of choosing legal battles, which only leads to waste of money, time and resources.

Sell off by FIIs does not impact markets; retail participation is more important, says SEBI executive director

<ul><li>FII inflows in May are typically erratic due to several factors impacting the domestic markets like monsoon predictions, <keyword id="6355644" type="General" weightage="20" keywordseo="elections" source="Orion">elections</keyword> and so on.</li><li>But this year, <keyword id="432394" type="General" weightage="20" keywordseo="fii-flows" source="Orion">FII flows</keyword> in May have been positive and the trend may continue, say analysts.</li><li>Also, FII inflows have remained persistent amid weakness in the US <keyword id="75201" type="General" weightage="20" keywordseo="dollar-index" source="Orion">Dollar index</keyword>.</li></ul>Foreign institutional investors (FIIs) have been on a buying spree so far in May – investing as much as ₹13,278 crore in equities as they turned net buyers on all days of this month. FII inflows in May are usually erratic due to several key factors including monsoon predictions. But this year, the FII flows are on a positive spree and the trend may continue, as per analysts. “Typically, several factors impact FIIs inflows in May every year including prediction of monsoon, if there is election and macro economic situation,” Shrikant Chouhan, head of equity research (retail), Kotak Securities told Business Insider. In 2022, FIIs pulled out ₹1.21 lakh crore. The selling continued in the first two months of 2023 before gradually reversing in March and April — with inflows of ₹1,997 crore and ₹5,711 crore respectively. “FIIs are net sellers on a year-to-date basis. However, some recovery was seen in the last one month. FIIs have pulled out the majority of the easy money from the Indian market, which they had pumped in after the Covid-19 crisis in March 2020. They have pulled out $23 billion in FY22/23 out of $37 billion pumped in FY21. Nonetheless, the pace of selling has reduced in the last three months,” said a report by Axis Securities. FII flows are gradually trending higher amid easing macroeconomic situation and hopes of a pause in interest rates cycle soon. India Meteorological Department (IMD) has also forecast a normal rainfall this year. Also, FIIs inflows have remained persistent amid weakness in the US Dollar index, which has weakened over 1.5% in the last three months. Rising interest rates make debt funds in developed nations attractive. This is one of the key factors for FIIs pulling out money from Indian markets and allocating it to such countries. Post Covid, the Russia-Ukraine crisis and elevated inflation in the country also impacted inflows. FII flows in May 2023 <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Net inflow by FIIs </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 2 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,997 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 3 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,338 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 4 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,414 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 5 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹777 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 8 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,123 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 9 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,942 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,833 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 11 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹837 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May 12 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,014 crore </td></tr></tbody></table> “In the last one and a half years, India failed to attract consistent FII money since our markets had become expensive compared to developed markets. And since interest rates went higher and higher in the developed markets, FII money shifted their money in such markets,” said Chouhan. However, the interest rates cycle finally seems to be turning. In the latest US Fed meeting in May, it signaled that the current tightening cycle is at an end, raising expectations for a pause in interest rates soon. “There is hope that the US Fed may cut rates in the coming 1-2 meetings. And it is clear that in the US, the next cycle will be a recession. So, FIIs may not invest there and rather invest in countries where there is growth – like India. And valuation-wise also India has become attractive compared to its position six months back. Also, whenever there is a possibility of a rate cut or the cycle is going to turn, FIIs start shifting their funds from bond to equity,” added Chouhan. Hopes of the US Fed pausing rates sooner also gave a boost to the domestic market that has been highly volatile this year. The Sensex has gained nearly 3% in the last one month alone, crossing the crucial mark of 62,000. It has gained 1.51% so far this year. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/tata-motors-posts-net-profit-of-5408-crore-in-q4-beats-estimates/articleshow/100189259.cms">Tata Motors posts net profit of ₹5,408 crore in Q4, beats estimates</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/adani-hindenburg-row-sc-hints-at-granting-sebi-extension-on-probe-report-to-decide-on-may-15/articleshow/100185994.cms">Adani-Hindenburg row: SC hints at granting SEBI extension on probe report, to decide on May 15</a>

FII inflows may remain consistent in May with turn in rate cycle

The <keyword id="6355302" type="General" weightage="20" keywordseo="rupee" source="Orion">rupee</keyword> appreciated by 9 paise to 81.52 against the US currency in early trade on Friday as crude oil prices were little changed ahead of the oil cartel OPEC's meeting. Expectations of FII inflows into Rs 20,000 crore <keyword id="16265593" type="General" weightage="20" keywordseo="FPO-of-Adani-Enterprises" source="Orion">FPO of Adani Enterprises</keyword> also bolstered the local currency. At the interbank foreign exchange market, the rupee opened higher at 81.51 against the previous close of 81.61 on Wednesday. The money markets were closed on Thursday for the Republic Day holiday. The rupee moved in a range of 81.50 to 81.58 in early trade. It was trading at 81.52 to a dollar at 0940 hours. Meanwhile, the US <keyword id="75201" type="General" weightage="20" keywordseo="dollar-index" source="Orion">dollar index</keyword>, which gauges the greenback's strength against a basket of six currencies, edged up 0.08 per cent to 101.92. Brent crude was trading 0.34 per cent higher at USD 87.77 per barrel. The Joint Ministerial Monitoring Committee of OPEC will meet next week to take a call on the output and full meeting of the cartel and allies. Also, the 20,000 crore FPO of Adani Enterprises opened on Friday. The company raised around Rs 6,000 crore from anchor investors. On the domestic equity market front, the 30-share BSE Sensex declined by 578.19 points to 59,626.87 while the broader Nifty fell 144.7 points to 17,747.25 in early trade. Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they sold shares worth Rs 2,393.94 crore, according to exchange data. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/homebuyers-expect-the-budget-2023-to-make-property-purchase-easier/articleshow/97304972.cms">Budget expectations: Homebuyers expect the budget to make property purchase easier</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/from-ray-to-rajamouli-a-look-at-indian-movies-makers-that-made-waves-internationally/slidelist/97306987.cms">From Ray to Rajamouli: a look at Indian movies &amp; makers that made waves internationally</a>

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Exodus of foreign investors from Indian markets continues unabated in October. But DIIs are holding the fort steady

Ira Alok Puranik

Sell off by FIIs does not impact markets; retail participation is more important, says SEBI executive director

Bhakti Makwana

FII inflows may remain consistent in May with turn in rate cycle

Bhakti Makwana

Rupee appreciates by 9 paise to 81.52 in opening trade

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