FIIs Surge Back as Net Buyers After Consecutive Sell-offs; Sensex, Nifty Trade in Tight Range

FIIs Surge Back as Net Buyers After Consecutive Sell-offs; Sensex, Nifty Trade in Tight Range​

Foreign Institutional Investors (FIIs) decisively returned as net buyers on July 21, injecting significant capital into Indian equities. The sector witnessed a marked shift from prior selling streaks, while Domestic Institutional Investors (DIIs) turned sellers for the day, marking a period of instability across institutional flows.

The market traded within a narrow range for the second consecutive session, reflecting an ongoing lack of directional conviction regarding major index movements. Nifty closed at 24,188, and Sensex ended at 77,470.

Foreign and Domestic Investor Trends Reversal​

FIIs managed a net inflow of Rs 1,650.16 crore on Tuesday. This was achieved through strong purchasing activity (buying shares worth Rs 16,327.88 crore) that slightly offset sales totaling Rs 14,677.72 crore.

In contrast, DIIs recorded a net outflow of Rs 656.88 crore. Although DIIs purchased shares amounting to Rs 14,638.54 crore, they sold equities worth Rs 15,295.42 crore during the session.

The latest data signals important trend changes across investor types. FIIs turned buyers after four consecutive sessions of net outflows. DIIs similarly switched roles after providing consistent support to the market in recent preceding sessions.

Trends in Institutional Flows and YTD Status​

The Tuesday inflow marked an arrest in the decline seen in foreign flows this month. At one point, FIIs had accumulated more than Rs 7,100 crore at the start of July before a four-session selling streak pared those gains. Overseas investors remain marginal net buyers for the month.

On a longer tenure view, however, FIIs remain net sellers year-to-date (YTD), having withdrawn around Rs 3.48 lakh crore from Indian equities. Domestic institutional investors continue to provide a critical counterbalancing force, investing nearly Rs 4.81 lakh crore YTD to offset the foreign outflows.

Indices Trade in Tight Range as Sectors Diverge​

The market movement was characterized by divergence across various sectors on the day. While PSU Banks and IT stocks saw profit booking from Monday’s gains, specific buying interest emerged strongly.

Auto, Defence, and Realty stocks were among those areas where interest picked up, with each of these promising sectors gaining around 1%. Meanwhile, the India VIX declined further to 12.54, indicating subdued volatility despite persistent global uncertainties looming over markets.

Analyst Advice: Clarity Needed for Major Index Breakout​

Shrikant Chouhan, Head of Equity Research at Kotak Securities, advised that a meaningful breakout will only be confirmed under specific conditions. The Nifty must surpass 24,500 (Sensex 78,700) or slip below 24,000 (Sensex 76,800) on a closing basis to signal clear direction.

Until such a decisive move occurs, the market is likely to maintain its stock-specific nature with limited index movement. The preferred investment strategy involves reducing weak long positions in the 24,350–24,450 (Sensex 78,300–78,600) zone while selectively accumulating quality stocks on market declines.