Domestic Investors Counter FII Sell-Off worth Rs 25,853 Crore.

Summary: 

Despite significant selling by foreign institutional investors (FIIs), robust buying from domestic counterparts has upheld the market's upward trend. Negative triggers like US bond yield hikes and geopolitical tensions haven't deterred bullish sentiment. Axis Bank's impressive Q4 results are expected to further boost market optimism. Regulatory constraints on Kotak Bank could hinder its growth trajectory.

In recent days, foreign institutional investors (FIIs) have been significantly divesting, with sales totaling a substantial Rs 25,853 crores. However, this selling pressure has been effectively offset by the robust buying activity of domestic institutional investors (DIIs), according to V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Despite the considerable FII selling, the market has maintained its upward trajectory due to the overwhelming purchasing power of domestic funds.

Despite negative triggers such as rising bond yields in the US and geopolitical tensions, the prevailing trend in this market remains bullish, according to him. He noted that these factors have failed to dampen market sentiment. Additionally, he highlighted that the fourth-quarter results of Axis Bank have exceeded expectations and anticipate a positive market response to this development.

Furthermore, he pointed out that regulatory restrictions on Kotak Bank may exert downward pressure on its stock. However, given the low levels of the VIX, he predicts that the market is unlikely to experience significant corrections in the near term. Instead, he foresees a period of consolidation ahead.

Motilal Oswal Financial Services noted that Kotak Mahindra Bank has been witnessing robust growth in its retail products, supported by a greater emphasis on digital sourcing and an expansion in unsecured products. The bank has expressed intentions to continue increasing the proportion of unsecured products, citing maintained asset quality and boosted profitability from enhanced cross-selling and lowered costs of digital sourcing.

However, the brokerage warned that the RBI's ban is likely to disrupt the bank's growth momentum in retail products, consequently affecting margins and overall profitability negatively. 

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Source - https://in.investing.com/news/fiis-sold-equity-worth-rs-25853-crore-in-last-seven-days-4146466