FIIs sell 3 billion usd in June as DIIs invest 9 billion usd in Indian equities Report

Foreign Institutional Investors sold a net $3 billion worth of Indian equities in June, while Domestic Institutional Investors invested $9 billion, offsetting the outflows. Analysts expect market sentiment to remain driven by monsoon progress, corporate earnings, crude oil prices and global developments.

New Delhi: Foreign institutional investors (FIIs) were net sellers ($3 billion) in June while domestic institutional investors (DIIs) were net buyers ($9 billion) in the Indian equity market, a report showed on Monday.

Over the last 12 months, Indian primary markets recorded FII net inflows of $8.1 billion while secondary markets suffered FII net outflows of $49.3 billion, said the report by JM Financial Institutional.

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In June, BFSI, Capital Goods, Pharma, Auto and Oil and Gas were the top 5 sectors in terms of FII shareholding.

These five sectors make up 60 per cent of FII assets in India, wherein FII shareholding increased sequentially in BFSI and Pharma and decreased in Capital Goods, Auto and Oil & Gas.

As a percentage of FII AUC (assets under custody) in India, BFSI continues to be the biggest at 30.8 per cent, up from 29.5 per cent in May. Capital Goods is the second highest at 7.5 per cent, down from 7.6 per cent in May. Pharma stood third at 7.4 per cent, rising from 7.1 per cent in May.

BFSI registered inflows of $357 million in June, followed by durables at $204 million, services at $130 million and realty at $85 million, said the report.

Looking ahead, institutional flows are likely to remain sensitive to a range of key domestic and global developments. Investors will closely track the progress of the monsoon season, given its implications for rural demand, agricultural output, and inflation trends, said analysts.

Additionally, the upcoming Q1FY27 corporate earnings season will provide crucial insights into the health of corporate India and the sustainability of earnings growth.

Global factors such as movements in crude oil prices and developments in the ongoing US-Iran peace talks will also remain important, as they could influence inflation expectations, energy costs, and overall risk sentiment.

While risks persist amid downward revisions to earnings growth estimates, monsoon-related inflation concerns, and continued FII caution, much of the visible uncertainty appears to be priced in, leaving room for a constructive read on incremental positives, said market watchers.