No Rexit impact? Foreign funds took out Rs 2,837 cr on Monday

Domestic institutions including state-run behemoth LIC saved the day for Indian markets on Monday, as overseas investors pressed sell-button amid 'Rexit' jitters to take out over Rs 2,837 crore from Indian markets - the highest single-day outflow so far this fiscal.

Life Insurance Corp, one of the most active institutional investors, is believed to have pumped in Rs 99 crore to purchase shares of 6-7 bluechip firms, while mutual funds also turned heavy buyers with a net purchase of shares worth Rs 459 crore and debt securities worth Rs 1,215 crore during the day.

The hectic buying by domestic institutions, as also by some top-shot brokers in their proprietary accounts, was in sharp contrast to heavy selling of stocks by foreign portfolio investors, retail investors and even the NRIs.

As per the depository data released today, FPIs were net sellers to the tune of Rs 2,837 crore in Indian markets during Monday's trade -- the first trading session after the much- celebrated RBI Governor Raghuram Rajan's surprise announcement over the weekend that he would not take the second term after end of his current three-year tenure on September 4.

The net outflow by FPIs in equities stood at Rs 528 crore, while in the debt market they were net sellers to the tune of a whopping Rs 2,310 crore.

Their overall net outflow at Rs 2,837 crore on Monday was highest for a single day since March 29, while their equities net outflow was also maximum in about a month since May 25.

The data released by markets regulator Sebi today showed that mutual funds bought shares worth Rs 1,462 crore and sold Rs 1,003 crore on Monday, resulting in a net purchase worth Rs 459 crore. For debt market, they were net buyer of shares worth Rs 1,215 crore.

As per the data from stock exchanges, all DIIs put together made a net inflow of Rs 724.06 crore in equities, which was more than the net outflow due to sell-off by FPIs -- thus helping the stock markets move higher.

However, the debt markets were not that lucky as sell-off by overseas investors there turned out to be higher.

While there was no official comment from LIC on queries about its purchase of shares on Monday, sources there said that the state-run insurer pumped in Rs 99 crore to buy shares of 6-7 blue chip companies.

The stock exchange data further showed that retail investors, while trading as clients of brokerage firms, were net sellers to the tune of about Rs 125 crore -- a figure much higher than their average daily figure.

The NRIs, who are not very active in Indian markets, also sold shares worth a net amount of Rs 4.35 crore, but the brokerage firms in their proprietary accounts were net buyers to the tune of more than Rs 25 crore -- again higher than their daily average figure.

The data shows a contrasting trend to the traditional pattern of foreign investors being net buyers on a day when the benchmark stock market indices like Sensex and Nifty close with gains.

FPIs are estimated to own over 20 per cent shares of all the listed shares available for trading in the country, while the holding of DIIs is just about 7-8 per cent. This ensures that the FPIs remain in a much stronger position to drive the movement of the Indian stock markets.

Marketmen said that the domestic institutions could have been pressed into hectic buying in select high-weightage stocks to counter the impact on index values due to heavy selling by foreign investors amid concerns relating to Rajan.

Stocks and rupee yesterday opened with an early morning plunge but equities bounced back to score a 241-point rally as Rexit jitters got blunted by a new wave of FDI reforms, hectic buying by institutions, talking-up by influential marketmen and easing Brexit worries.

Rupee, however, could not be saved of its morning blues entirely and ended 23 paise down at Rs 67.31 against the US dollar, although intervention by RBI in the forex markets helped its partly recoup the losses. The Indian currency had plunged almost one per cent or 61 paise to a low of Rs 67.69.

Stock market benchmark Sensex plunged to as low as 26,438 points in pre-open trade between 0900-0915 hours, down nearly 200 points from its previous close, but early morning buying orders helped limit the opening loss at 178 points.

After touching a low of 26,447.88 in opening trade, the Sensex recovered sharply to scale an intra-day high of 26,885.49 points before finishing at 26,866.92, showing a gain of 241.01 points or 0.91 per cent.

The Sensex, however, moved lower today and closed 54 points down at 26,812.78.

As per the provisional data released by the stock exchanges for today's trade, the foreign investors were net buyers to the tune of Rs 485 crore, while domestic institutions made a net outflow of Rs 335 crore.

The retail investors trading as clients made a net purchase of Rs 23 crore, while proprietary accounts saw net sales of Rs 1.15 crore. The NRIs sold shares worth a net amount of Rs 89 lakh.