Domestic institutional investors net purchase at Rs 7,768 crore during the week; FII net inflows at Rs 2,911 crore

Representational Image. File pic.

Domestic institutional investors (DIIs) maintained their optimism during the last week, with their net purchases aggregating to Rs 7,768 crore. DIIs were net in four of the five trading sessions last week.

DII ownership as a percentage of total Indian equities has risen over the years, reaching 18.7 per cent in March 2026, and 17 per cent of NSE-listed companies, according to news agency IANS.

Foreign institutional investors (FIIs) remained net buyers for the second consecutive week with net inflows Rs 2,911 crore in the current week. FIIs net investment was Rs 5,949 crore in the previous week, according to Bajaj Broking Research.

"The sustained buying by both FIIs and DIIs was largely driven by the de-escalation of geopolitical tensions, which helped strengthen investor confidence and supported positive market sentiment," said Pabitro Mukherjee, Deputy Vice President Research, Bajaj Broking.

FIIs turned net buyers in July after being net sellers for four consecutive months since March. In July, FIIs were net buyers with inflows USD 2.5 billion. The primary market recorded net FII inflows of Rs 123 billion and the secondary market saw net FII inflows of Rs 110 billion, according to IANS.

FII ownership of total Indian equities has fallen from 20 per cent in July 2016 to 14.3 per cent in July 2026, according to JM Financial Institutional Securities.

It highlighted that over the last one year, Indian primary markets have garnered FII net inflows of USD 7.8 billion, while secondary markets suffered FII net outflows of USD 42.5 billion.

What are FIIS and how do they impact the equity market?

FIIs are big overseas investment firms such as foreign mutual funds, hedge funds, and insurance companies who invest in Indian equities and debt markets.

FIIs buy in bulk and their investment usually signals their optimism in the equity market, causing the benchmark indices Sensex and Nifty to rally. When they start offloading their stake, it causes sharp correction in market indices and can create short-term volatility in the market as other investors might dump stocks tracking the FII sentiment.

FIIs track global cues such as crude oil prices or US data related to inflation, Federal Reserve policy. When the US Treasury yields (higher) appears as a better investment compared to emerging markets, the FIIs tend to pull out from the Indian markets and park their funds in safer alternatives.

What are DIIs and their impact on Indian equities?

DIIs are Indian mutual funds, life insurance companies, banks and other financial firms that invest in equity and debt market. The DII inflows are crucial to weather the impact created by FII selling, stabilising the market.

According to Securities and Exchange Board of India (SEBI) DIIs emerged as a key pillar of India's equity markets in FY26 recording net inflows of a record Rs 8.5 lakh crore and more than offsetting foreign portfolio investor (FPI) equity outflows of Rs 1.8 lakh crore. Foreign investors (both individual and institutional) are referred to as FPI by SEBI for transparency purposes.

(With inputs from IANS)