FII Pressing the Sell Button

Recently, Foreign Institutional Investors (FIIs) have been offloading equities at an unprecedented pace. In October alone, till date they sold nearly ₹92,142 crore, contributing to a year-to-date outflow of approximately ₹2,17,175 crore.

The question I am frequently asked is: What should one do now? Is it time to exit, or should investors consider adding more funds?

To answer this, we need to look at the day Nifty chart for this year.

As shown in the chart, the Nifty performed well until the end of September. However, the recent FII sell-off has driven it below its 50-day moving average (DMA). The next key level of support lies around the August lows of 23,800–23,900. A breach below this range could push the Nifty towards its 200-DMA, currently positioned at 23,450.

In the best-case scenario, the market might consolidate between these two levels—the 50-DMA at 24,950 and the 200-DMA at 23,450. However, if the Nifty breaks below the 200-DMA, the next significant support lies in the range of 21,300–22,000, around the election-day lows

While it is still premature to predict whether the market will test these lower levels, this period presents an opportunity to stay prepared with liquidity for timely deployment as attractive opportunities emerge.

To gain more clarity on future market movements, it’s crucial to monitor the daily & weekly Nifty chart for emerging trends and potential entry points.