DIIs press sell button after 39 months, offload equities worth Rs 46,835 crore in November

Domestic institutional investors (DIIs) have turned out to be net sellers for the first time since August 2023. Monthly data for DII activity show that DIIs sold equities worth Rs 46,835 crore in November 2026 till date. Selling on a monthly basis comes after 3.5 years or 39 months of continuous buying by DIIs.

DIIs last turned bearish on the Indian market in July 2023 when they sold equities worth Rs 2697.66 crore. In October this year, they bought Indian stocks worth Rs 62,220 crore.

The 39-month buying streak came to an end this month as FIIs made a stellar entry into Indian market buying equities worth Rs 73,565 crore. This buying activity by FIIs comes after 16 months of relentless selling caused by the US-Iran war, India-US trade deal, correction in Indian stock market, AI tech stocks boom and rising Brent Crude oil prices.

The role reversal by FII and DIIs comes amid the Indian market logging a winning streak for ten straight sessions in November.

The rally for ten days was supported by global funds reallocating their portfolios, India’s growth potential, and falling Brent crude oil prices.

Commenting on rising FII inflows, Motilal Oswal Research said, "Given India's healthy macroeconomic fundamentals, strong corporate earnings, a meaningful correction in valuations from their 2024 peak levels, and robust domestic liquidity, any moderation in the global AI trade could encourage a stronger and more sustained revival in FII interest in relatively underperforming EMs such as India. Easing FII selling in large-cap-heavy sectors also supported the relative outperformance of large caps over SMIDs during the month."

The brokerage further noted that continued improvement in FII sentiment, coupled with easing geopolitical challenges, could help offset the headwinds that have weighed on Indian markets over the past two years and lay the foundation for a sustained market rally.