FII Redemption
While the stock market is hovering around all-time high levels, foreign investors have seemingly triggered the panic button.
Amid worries over the intense second wave and possible impact on the economy, the FIIs are continuously pulling out from the Indian equities. They have withdrawn Rs 5,936 crore in the first week of May after the withdrawal of Rs 9,659 crore in April. Before that, the FPIs had infused money in the preceding six months.
While FPIs are pulling away, domestic institutional investors are pumping the market currently. The DIIs have been net buyers in Indian equities and invested Rs 5,204 crore and Rs 11,088 crore during March and April, respectively. They have been the net buyers even in May with Rs 2,135 cr invested so far.
FII investment is crucial for markets to maintain their current levels. Although DIIs are pumping in the money currently, they can never match the might of FIIs. Hence, the market may find it difficult to sustain, if FIIs redemption continues.
Source link
