Have the FIIs Lost their Way?

Summary

The video discusses the Indian stock market's impressive 69% rise since mid-June 2022, with Nifty soaring to 25,791. Despite this, foreign institutional investors (FIIs) have been net sellers, losing out on significant gains. Domestic institutional investors, conversely, capitalized on market lows, purchasing heavily when FIIs sold off. The script questions FIIs' market timing, suggesting they've missed out on opportunities in sectors like infrastructure, defense, and energy transition, and ponders if they will now start making aggressive investment mistakes in the ongoing bull market.

Takeaways

• 📈 The Nifty 50 index has seen a significant rise of about 69% from mid-June 2022 to September 2024, reaching 25,791.
• 💹 Domestic institutional investors have been major buyers during market downturns, investing heavily when the market was at its lowest.
• 📉 Foreign institutional investors (FIIs) have been net sellers during the bull market, recording sales of about 1.82 lakh crores.
• 🌐 Global market pressures such as US inflation, China's post-covid recovery, and the Russia-Ukraine conflict have influenced FIIs' investment decisions.
• 🏦 Domestic institutional investors bought shares worth almost 47,000 CR in June 2022, which was the market bottom.
• 📊 FIIs have made poor investment calls at major market turns, selling at lows and missing out on significant gains.
• 💼 Despite their reputation, FIIs have shown a pattern of making mistakes, acting more like retail investors during market fluctuations.
• 🚀 Domestic institutional investors have consistently outperformed FIIs, capitalizing on market opportunities effectively.
• 💸 FIIs have been net sellers for an extended period, even during pre-election months and post-election, showing a lack of confidence in the Indian market.
• 🔄 The trend of FIIs' dominance in the Indian market has shifted, with mixed feelings of fear and respect emerging among investors.

Q & A

What was the performance of the Nifty index from mid-June 2022 to its peak in September 2024?

The Nifty index soared about 69% from mid-June 2022 to hit 25791 in September 2024.

How much money did reckless derivatives traders lose in FY 24 according to the Securities Exchange Board of India?

Reckless derivatives traders lost about 52,000 CR in FY 24.

What was the role of Foreign Institutional Investors (FIIs) during the bull market between June 2022 and September 2024?

FIIs were net sellers during the bull market, recording net sales of about 1.82 lakh crores.

Who were the major buyers when FIIs were selling at the market bottom in June 2022?

Domestic institutional investors were the major buyers, purchasing almost 47,000 CR in June 2022.

What was the behavior of FIIs during the market downturn in January 2023 after the Hindenburg Revelations about Adani stocks?

FIIs sold shares worth over 41,000 CR in January 2023, while domestic institutional investors bought 33,000 CR.

How did FIIs perform collectively at major market turns between June 2022 and September 2024?

FIIs collectively took surprisingly poor calls at almost all major market turns, often selling at the bottom and buying at the top.

What was the investment trend of Domestic Institutional Investors (DIIs) during the same period?

DIIs were big buyers during the period, with net purchases of 70,000 CR when FIIs were selling in mid-2023.

How did FIIs behave in the pre-election months in terms of their investment in the Indian market?

FIIs sold shares worth 1.26 lakh CR in the pre-election months, while DIIs made net purchases of over 2 lakh CR.

What was the mistake of omission made by FIIs during the bull market?

FIIs failed to participate in the big run-up in better quality infrastructure, defense, and energy transition, and public sector companies.

What is the author's speculation about FIIs' future behavior in the market given the US Federal Reserve's rate cuts and Indian government's growth-oriented policies?

The author speculates that FIIs may start making mistakes of commission, charging forcefully into a strong bull market.

What does the author suggest about the image of FIIs as cool and competent professionals?

The author suggests that the image of FIIs as cool and competent professionals is often false, as they can make mistakes, especially during market euphoria.