There is no ease in relentless FPI outflows in the domestic stock market, with provisional figures for Thursday suggesting Rs 11,756.25 crore selloff by foreign investors in a single trading session. Data available with NSDL showed FPI flows have turned negative for Calendar 2024 now, with net Rs 6,486 crore outflows.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said the inexplicable volatility in FII activity has led to perplexing market action in recent days.
“A few days of buying followed by yesterday’s massive selling of Rs 11,756 crores is difficult to explain. What are the factors contributing to this apparently irrational activity? Is this a one-off? Or, is there more to come? Answers to these questions will be available in the coming days. It is better for investors to wait and watch. Lots of stock specific actions are likely starting today in response to the inclusion of 45 new stocks to the F&O list,” he said.
For investors, Vijayakumar said the ‘Buy on dips’ strategy may not yield short-term gains in this market. “But this strategy can be applied by investors with a medium to long-term time horizon. Largecaps in financials, IT, capital goods and telecom are ideal for accumulation from a medium to long-term perspective,” he said.
Traders, on the other hand, should remain cautious and look for confirmation of price action at key levels before initiating fresh positions, said Choice Broking.
“The immediate support for Nifty is placed at 23,800 and 23,680, which align with strong Fibonacci levels. These zones could act as potential reversal points, offering a buying opportunity if confirmed by price action. On the upside, 24,350 serves as immediate resistance. A sustained move above this level could propel the index toward 24,800 and 25,000, unlocking significant upside potential,” it said.
Nuvama said while October was a nightmare for Indian equities, November did not come bearing relief — it was more like a sequel in the saga of market woes.
“For the first time in nearly a year and a half, the Nifty 50 dipped below its 200-day moving average, stirring up unease among investors. Though it managed to claw its way back by the November F&O series’ end, the index still closed 1.2 per cent lower,” Nuvama said.
Nuvama said stretched valuations, relentless foreign outflows, and an underwhelming Q2FY25 earnings season were a toxic cocktail that left the markets gasping for breath on most days.
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