Mumbai: Foreign institutional investors (FIIs) have turned cautious this month ahead of the potential India-US trade deal announcement and upcoming Q1 FY26 results, analysts said on Saturday.
FIIs were net buyers in the last two months, buying Rs 18,082 and Rs 8,466 worth of shares in May and June, respectively. However, the trend seems to have faded in the current month.
The FII activity in early July indicates selling. In the first four days, FIIs were sellers every day, with a cumulative sell figure of Rs 5,772 crore.
“Resumption of FII buying will hinge on two things — one, if a trade deal happens between India and the US, that will be positive for markets and FII flows — and two, Q1 FY26 result indications,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
It will be good if the results show a recovery in earnings. If these factors are not met, it may affect the market and FII flows, he added.
On Friday, FIIs offloaded Rs 8,277.90 crore, while domestic institutional investors sold shares worth Rs 11,334.32 crore, according to the latest data available on BSE.
FIIs purchased shares in financials, cars and auto parts, and the oil and gas sector in the second half of June. They sold equities in power and capital goods companies. Profit booking is a trend in recent high-performing segments.
Meanwhile, ahead of the pivotal July 9 US-India trade deadline, investors remain cautious, resulting in the Indian equity markets ending the week lower.
The Sensex and the Nifty, two benchmark indices, fell 0.7 per cent each as profit booking following the recent rally and global uncertainty continued to taint overall market sentiment. The Sensex closed the week at 83,432.89. The Nifty ended the week at 25,461.
The week began with a robust breakout for the indices, but worries about a potential hold-up in finalising trade agreements caused the momentum to wane.
(IANS)
