 "Markets, Stock market, sensex, stock market indices")
DII buying trends: Domestic Institutional Investors (DIIs) have been actively purchasing shares since the start of the year. Between January and May 28, DIIs have purchased shares worth Rs 1.97 trillion.
According to Bloomberg data, foreign investor holdings in NSE-listed companies fell to an 11-year low of 17.7 per cent during the March quarter. On the flip side, the growing enthusiasm among domestic investors has not only pushed the overall domestic investor holding to 16.1 per cent, but taken the holdings by domestic mutual funds to an all-time high of 8.9 per cent.
Also Read: NSE cos: FII holding at 11-year low, domestic MFs stake at all-time high
Also Read: NSE cos: FII holding at 11-year low, domestic MFs stake at all-time high
That apart, at the end of Q4FY24, the difference between the Foreign Institutional Investors (FII) and DII ownership of Indian equities stood at 1.6 per cent, compared to a 10.3 per cent gap recorded in March 2015, which was twice the domestic investor holdings at that time.
Analysts attribute this trend to several factors including the surge in funds from Systematic Investment Plans (SIPs).
The total amount collected through SIP during April this year stood at Rs 20,371 crore. Meanwhile, in March, SIP collection was Rs 19,271 crore.
"Key reason behind the buying spree of DIIs is the influx of funds from Systematic Investment Plans (SIPs). With a substantial amount flowing in, mutual funds are compelled to deploy capital rather than keeping it idle," said Ambareesh Baliga, an independent market analyst.
Also Read: Average SIP size up 9.6% at Rs 2,340 in April: Where are Indians investing?
Another factor influencing this buying spree, analysts said, is the consistent selling by FIIs. Thus far in CY24, FIIs have offloaded shares worth Rs 1.19 trillion.
More From This Section
"FIIs have been consistently selling Indian equities due to expensive valuation. DIIs, on their part, have been buying consistently to absorb the flood of liquidity," Baliga added.
The third factor, analysts point out, is the expectation of the Bharatiya Janata Party (BJP) returning to power after the Lok Sabha elections.
In May alone, DIIs bought shares worth Rs 44,952.16 crore, while FIIs sold shares worth Rs 34,935.53 crore.
"The nervousness in the market continues with uncertainty regarding the election results. An important sustaining trend during this uncertain phase is the continuous buying by DIIs which has reached around Rs 45,000 crore so far this month. This can be interpreted as a reflection of expectation of political stability after the election results. However, it appears that retail and HNIs are in a wait and watch mode," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
Also Read: Where is the money flowing? FIIs churn consumption basket, favour fintech
Further, India's robust economic performance, underscored by the recent gross domestic product (GDP) growth rate of 8.4 per cent in Q3FY24, coupled with macro-economic indicators, signal a potent momentum for the domestic economy.
Further, India's robust economic performance, underscored by the recent gross domestic product (GDP) growth rate of 8.4 per cent in Q3FY24, coupled with macro-economic indicators, signal a potent momentum for the domestic economy.
With strong corporate earnings growth in FY24, primarily fuelled by domestic-oriented industries, analysts believe the prospect of sustained profitability is drawing inflows.
