Foreign Institutional Investors Sell Indian Equities Worth Rs 1,597 Crore Amid Foreign Fund Inflow

Indian Equities End Largely Flat Amid Weak Global Cues and Macro Concerns

On May 20, foreign investors (FIIs/FPIs) net sold shares worth Rs 1,597 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 1,968 crore. During the trading session, DIIs purchased shares worth Rs 16,001 crore and sold shares worth Rs 14,032 crore. In contrast, FIIs bought shares worth Rs 14,140 crore but sold shares totalling Rs 15,737 crore.

Market Performance

The Nifty 50 closed marginally higher, while the broader markets remained subdued. For the year so far, FIIs have been net sellers of shares worth Rs 2.63 lakh crore, and DIIs have net bought shares worth Rs 3.38 lakh crore.

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According to Siddhartha Khemka, Head of Research at Motilal Oswal Financial, markets are likely to remain cautious in the near term due to an unfavourable macro backdrop. The rupee's continued weakness, elevated Brent crude prices near USD 111/bbl, and high US bond yields are tightening financial conditions and weighing on sentiment. FIIs turned net sellers after three consecutive buying sessions, and the rise in domestic G-Sec yields to six-week highs could delay the lending rate relief that markets were anticipating.

The bond markets are pricing in re-accelerating inflation, with the US 30-year yield crossing 5.1%, a 19-year high, and the 10-year yield moving above 4.5%. Rising US yields make dollar assets incrementally more attractive, pulling capital out of emerging markets, weakening the rupee, and pushing Indian G-Sec yields higher simultaneously.

In other news, peak power demand hit an all-time high of 260.45 GW amid intensifying heat wave conditions, with temperatures expected to rise further. This is a clear positive read-through for power utilities, AC manufacturers, and summer beverage names. Additionally, the upcoming visit of US Secretary of State Rubio (May 23 to 26) and the India-Italy "special strategic partnership" spanning defence, AI, clean energy, and IMEC provide a longer-runway thesis for defence and infrastructure plays.