Foreign Institutional Investors continued their selling spree in the Indian markets for the 8th consecutive session on Monday, being net sellers to the tune of Rs 2,546 crore in the cash markets, provisional data from exchanges showed. The Sensex and Nifty ended broadly in the red on aggressive selling amid concerns over the banking sector turmoil. The Sensex ended lower by 360 points at 57,628, while the Nifty declined 111 points to 16,988.40.
However, so far in March, FIIs have been net sellers in the cash market. The selling in February and January however remains an overhang. In January, FIIs sold Indian shares worth Rs 41,460 crore and Rs 11,090 crore in February. Flows from domestic institutional investors have been resilient over the period of time and has offset the large foreign outflows. On Monday, DIIs were net buyers in the cash market to the tune of Rs 2,876 crore, provisional data from exchanges showed.
In January and February, DIIs remained net buyers of Indian equities, lapping up shares above Rs 19,000 crore in both months.
According to market watchers, the markets currently have entered the oversold territory and a bounce back is due anytime soon. FIIs currently hold 90% shorts in Index futures, and any positive trigger globally or domestically could lead to a short covering of the contracts. “The support for the Nifty is placed at around 16,850 – 16,800 levels and resistance is capped at 17,300 – 17,400 levels. In case the Nifty breaches below 16,800 levels then, 16,500 will be on the cards,” said Rohan Patil of SAMCO Securities.