FIIs turn net buyers in September

In a total reversal of trend, the domestic institutional investors (DIIs) have turned net sellers in September while the foreign institutional investors (FIIs) ,which were the major sellers last month, are on a buying spree.

According to the provisional figures for September, the DIIs, which include insurance companies and mutual funds, sold a net equity of Rs 1,455 crore, whereas the FIIs were the net buyers of Rs 3,476 crore worth equity. On Friday, DIIs sold shares worth Rs 260 crore while FIIs brought shares worth Rs 1,200 crore.

This is in contrast to August when the markets were hit hard after massive selling by FIIs.This was when the sub-prime crisis had hit the global markets.

In August, FIIs sold net shares over Rs 12,000 crore, but domestic institutions acted as a cushion, buying a net of over Rs 9,000 crore. Of this, the mutual fund houses bought shares worth over Rs 4,000 crore.

"Fearing yet another market correction, investors want to book profits as the Sensex has bounced back over 1,800 points (from 13,779 on 17 August). Investors are also reluctant to take chances before the US Fed meeting scheduled on September 18 and the results season beginning in the first week of October," said a CEO of a fund house.

Sanjay Sinha, CEO SBI MF, said that the Fed meet of September 18 was not a major event for the Indian markets as it may just come and go.

"Even if Fed cuts interest rates by 25 bps against the general expectation of 50 bps it's fine and there may be no panic selling. In the worst case too, we could see a downward blip in the markets and this would make it more attractive. Moreover, we are positive on our stock picks," he said.