New Delhi, May 2 (H.S.): Amid stock market fluctuations, domestic institutional investors (DIIs) have for the first time surpassed foreign institutional investors (FIIs) in equity holdings, indicating potential market stability.

Data from ACI Equities reveals that as of March, DIIs held 16.91% of the stock market compared to FIIs’ 16.84%. This shift reflects a combined asset value of ₹69.80 lakh crore for DIIs versus ₹69.58 lakh crore for FIIs. Since October last year, FIIs have been significantly selling off, withdrawing ₹2.06 lakh crore, while DIIs actively supported the market by purchasing ₹3.97 lakh crore. This trend demonstrates a marked increase in DII investment, particularly through Systematic Investment Plans (SIPs), even in a declining market.

Srikant Chauhan, head of equity research at Kotak Securities, notes that while FIIs sold more than they bought over the past year, DIIs have consistently bolstered their equity presence. Due to the stability associated with DII investments, which are less prone to large-scale withdrawals triggered by international events, their predominant role may help mitigate market volatility caused by foreign selling. Thus, the ascendance of domestic institutional holdings over foreign ones is a positive indicator for the future of the Indian stock market, suggesting that any adverse effects from foreign sell-offs could be countered, leading to a more resilient market environment.

Hindusthan Samachar / Jun Sarkar