Foreign Institutional Investors Sell Rs 8,776 Crore, Domestic Institutional Investors Purchase Rs 9,134 Crore on June 5

Market Update: Domestic Investors Offset Foreign Outflows, Equities Rebound

Foreign investors (FIIs/FPIs) net sold shares worth Rs 8,776 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 9,134 crore on June 5, according to provisional data on the exchange.

During the session, DIIs purchased shares worth Rs 22,779 crore and sold shares worth Rs 13,646 crore, while FIIs bought shares worth Rs 11,045 crore but sold shares totalling Rs 19,821 crore. The disparity in buying and selling activity between the two groups contributed to the net outflow of shares by FIIs.

For the year so far, FIIs have been net sellers of nearly Rs 3.26 lakh crore worth of shares, while DIIs have been net buyers of shares worth Rs 4.09 lakh crore. The contrasting trends highlight the differing investment strategies adopted by foreign and domestic investors.

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The benchmark equity indices Sensex and Nifty erased early gains and turned lower on Friday as investors booked profits at higher levels following the Reserve Bank's monetary policy announcement. The Sensex had initially climbed 357.56 points or 0.48 percent to 74,717.57 in early trade, while the Nifty advanced 99.8 points or 0.42 percent to 23,516.35.

However, selling pressure emerged later in the day, leading the benchmarks to surrender all gains. The Sensex settled 116.66 points or 0.16 percent lower at 74,243.34, while the Nifty slipped 49.85 points or 0.21 percent to 23,366.70. From the day's high, the Sensex had declined by more than 450 points.

The Nifty and Sensex fell about 0.8 percent and 0.7 percent this week, taking their year-to-date losses to 10.6 percent and 12.9 percent, respectively. The declines have been driven by foreign outflows, elevated oil prices, limited AI exposure, and moderating earnings.

Fast-moving consumer goods fell 2.2 percent this week and were the top sectoral losers after India forecast an El Nino-weakened monsoon in 2026. The sector's performance is likely to be impacted by the reduced monsoon, which could lead to lower agricultural output and, in turn, affect consumer demand.

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The RBI's monetary policy announcement has sent a nuanced message to equities, with policymakers prioritising macro stability over aggressive growth. While the immediate market reaction may remain muted, a successful strategy of containing currency and inflation risks could create a stronger foundation for equities over the medium term.