While foreign institutional investors continue to sell Indian shares, domestic investors have stepped up with significant buying, cushioning the market amid global and domestic macroeconomic challenges.
Foreign investors continued to pare exposure to Indian shares on 11 September, but domestic institutions again stepped in to steady the market, according to data from the National Stock Exchange. Foreign institutional investors sold a net ₹930.90 crore, while domestic institutions bought a net ₹1,968.17 crore, helping to absorb a sizeable portion of the selling pressure.
That pattern has held through much of September. Domestic institutions have already deployed more than ₹24,987 crore this month, a pace of buying that has helped cushion the market even as foreign investors have turned cautious. The support has not been enough to prevent weakness altogether: the Nifty 50 finished the week 2.1% lower, reflecting a broader risk-off mood.
Investors are weighing several macroeconomic headwinds. Crude oil has moved above $108 a barrel amid Middle East tensions, increasing concerns about import costs and inflation. At the same time, the rupee has been under pressure, recently trading near ₹95.75 to ₹95.80 against the dollar. A weaker currency tends to lift the cost of imports and can weigh on company earnings, particularly for businesses dependent on overseas inputs.
Attention is now turning to the next round of economic and policy signals. Market participants are watching India’s inflation data and the US Federal Reserve’s upcoming decision, alongside US Treasury yields that remain close to 5%. Those releases will help shape expectations for global capital flows, interest rates and the resilience of domestic buying in Indian equities.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
