Foreign Fund Outflows Weigh on Markets as Nifty Declines 0.5 percent This Week

New Delhi: Foreign institutional investors (FIIs) became net sellers in Indian equities for the week ending August 21, selling shares valued at ₹1,602 crore. This selling followed three straight weeks of FII purchases and added to the cautious sentiment in domestic markets. Meanwhile, domestic institutional investors (DIIs) kept up strong buying, putting ₹17,320 crore into the market over the five trading days.

Key Takeaways

• FIIs turned net sellers in Indian equities for the week ending August 21, selling Rs 1,602 crore, ending three weeks of buying.
• DIIs continued strong buying, investing Rs 17,320 crore over the same five trading days.
• FIIs remained net buyers over the past month, with Rs 1,282 crore in accumulated purchases; DIIs invested Rs 34,370 crore in August so far.
• Crude oil above $92 a barrel and US-Iran tensions kept broader market sentiment under pressure.

FII activity was uneven throughout the week. Foreign investors started by selling, then turned buyers over the next two sessions, and went back to selling in the last two trading days. Although the latest outflow occurred, FIIs remained net buyers over the past month, accumulating purchases of ₹1,282 crore. So far in August, their net investment totals ₹2,510 crore, whereas DIIs have invested ₹34,370 crore.

The wider market stayed under pressure due to high crude oil prices and ongoing geopolitical tensions, which dampened investor sentiment. Crude prices remained above $92 per barrel, heightening worries about inflation and corporate expenses, while uncertainty around the US‑Iran situation prompted investors to stay cautious. The Nifty dipped to an intra‑week low of 24,026 before rebounding during the final two sessions.

The benchmark Nifty finally closed at 24,252, marking a 0.5 percent weekly drop and extending its corrective phase for a second consecutive week. However, the broader market showed relatively more resilience, with the Nifty Midcap 100 finishing almost flat and the Nifty Smallcap 100 rising over 1 percent after hitting a fresh record high. Market participants are likely to watch crude prices, global developments and foreign investor flows closely in the upcoming sessions.