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March flows prove FII remain ultimate price-setters, says analysis

In October 2018, the benchmark Nifty fell 5 per cent despite highest-ever month inflow of over Rs 24,000 by MFs

Samie Modak & Ashok Divase  |  Mumbai 

FII, foreign investor

Foreign institutional investors (FIIs) poured over Rs 33,100 crore ($4.8 billion) into the domestic equity in March. This was one of the best month in terms of overseas flows in the history of Indian The sharp inflows led to an 8 per cent rally in the benchmark indices. The gains were despite selling worth Rs 7,160 crore by domestic (MF). An analysis of market performance during months when and MF have been big buyers of equities shows overseas investors are bigger price setters.

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In October 2018, the benchmark fell 5 per cent despite highest-ever month inflow of over Rs 24,000 by MFs. The same month saw selloff worth Rs 27,623 ($3.8 billion). The has gained an average 5 per cent during the five best months in terms of flows. While it has declined an average 3.5 per cent during the five worst months of FII selling. Interestingly, the has declined an average 3.5 per cent during the five months of highest MF buying and has gained an average 6.4 per cent during five months MF have sold the most.


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First Published: Tue, April 02 2019. 00:14 IST
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