look news india
Investment by domestic institutional investors (DIIs) in Indian stocks in August was the highest in the last three months.
On the other hand, the investment flow of foreign portfolio investors (FPIs) slowed down due to increase in valuation and global turmoil. In the month of August, about Rs 48,280 crore was invested in shares by DII. Whereas this ratio was Rs 23,486 crore in July and Rs 35,845 crore in June.
The benchmark Nifty and Sensex rose 1.1 per cent and 0.8 per cent, respectively, in August, marking their third consecutive month of gains, driven by expectations of a rate cut by the US Federal Reserve at its meeting later this month.
Comparatively, August saw an investment inflow of Rs 7,320 crore from FPIs into Indian stocks. Which was the lowest level of the last two months. In the first quarter of 2024-25, FPI inflows declined due to volatility in global stocks and high valuations as the market witnessed a cautious stance. Apart from this, FPI inflows were seen in August due to the strength of the primary market. According to the data, if the primary market inflows are removed, FPIs sold shares worth about Rs 5,551 crore. A similar trend was also seen from FPIs in the initial months. There was selling by FPIs in the secondary market while there was a buying trend in the primary market. Disappointing earnings data from important sectors led to a change in the investment strategy of FPIs. Perhaps due to this situation, FPIs have withdrawn from maintaining their positions in Indian stocks. The volatility of trading in the yen in the first fortnight of the current month and concerns about a possible recession in the US may also have affected investor strategies in August. According to experts, the biggest reason for increased FPI outflow in Indian stocks is the high valuation of stocks.