Domestic institutional investors pour record over Rs 1 lakh cr in equities in October

Mumbai: In a new monthly record, domestic institutional investors (DIIs) infused more than Rs 1 lakh crore in Indian equities in October amid heavy selling by foreign institutional investors (FIIs), thus keeping the stock market healthy compared to its global peers.

This sustained DII activity came as the cumulative foreign portfolio investor (FPI) selling in equity through the Indian stock exchanges stood at Rs 102,931 crore (till October 24).

So far, the DII investments have been around Rs 4.41 lakh crore, with two more months to go, driven by growing retail participation through mutual funds.

Earlier, the highest recorded monthly DII inflows were registered in March this year, at about Rs 56,356 crore.

According to market experts, DII inflows are a result of SIP contributions alongside insurance and retirement fund flows.

FPIs are likely to continue their selling in the near-term since the market sentiment has turned weak due to the escalation of tensions in the Middle East and the uncertainty regarding the outcome of the US presidential elections.

Going forward, domestic macros are largely favouring the market with the unveiling of strong Purchasing Managers' Index (PMI) data and strong economic growth forecast by the Reserve Bank of India (RBI) for FY25. The resilience of recent manufacturing data suggests the plausibility of an economic recovery in H2 FY25, which should encourage investors to accumulate quality stocks, said experts.

Foreign institutional investors (FIIs) sold equities worth Rs 4,613 crore on October 30, while domestic institutional investors bought equities worth Rs 4,518 crore on the same day.

A significant trend in the market is the strong stock-specific action.

Better-than-expected results are responded with sharp moves up to 20 per cent a day while worse-than-expected results are met with around 15 per cent correction.

According to experts, this trend of strongly rewarding good results and punishing poor results equally strongly is a reflection of the focus on stock-specific action rather than focus on the benchmark indices and market as a whole.