FIIs' single-day selling highest since June; what does it indicate?

As the Indian market closed in the red for the fifth straight session, the foreign institutional investors (FIIs) seem to be distancing themselves from the domestic equity market. It was visible in the sharp sell-off on Monday, September 27. In the biggest single-day sell-off in the past three months, FIIs sold to the tune of Rs 5,101.30 crore in the Indian cash market against a net buy of Rs 3,532.18 crore by the domestic institutional investors (DIIs). This was the biggest sell-off since June 17 when the FIIs pulled out funds worth Rs 7,818.61 crore in a single day.    

With the Monday's selling, the FIIs have turned net sellers in the cash market with Rs 7,547.12 crore withdrawal.    

Earlier, It had remained a net seller as of September 23 and sold equities worth Rs 461.04 crore on 21st September, Rs 2,509.55 crore on 22nd September and Rs 2,899.68 crore during Friday's sell-off (Sept 23), resulting in a net negative flow Rs 2,445.82 crore till then.    

"In search of a safer dollar and elevated bond yields, foreign investors are withdrawing from Indian equities, resulting in the decline of the domestic market," said Vinod Nair, Head of Research at Geojit Financial Services, on Tuesday.    

The dominant dynamic roiling equity and currency markets globally is the combination of relentless rise in dollar and the sustained rise in US bond yields, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.   

"So long as this trend continues, equity markets will be under pressure. FPIs turning big sellers in India (Rs 5101 cr in cash market yesterday) is an indication of the risk-off in equity in emerging markets," he added.    

Speaking on the current FIIs trend, Zee Business Managing Editor Anil Singhvi said the market has already corrected from FIIs selling pressure. We are much better placed than the US markets.    

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Earlier, extending its losing streak to the fifth consecutive session, the broader Nifty50 marginally declined to close at 17,007.40, while the Sensex too saw a negligible cut to end at 57,107.52.