FIIs vs DIIs: June Equity Flows – Rs 4,892cr & Rs 44,000cr
Foreign Institutional Investors (FIIs) are selling Indian equities, with outflows reaching Rs 4,892 crore in June, a stark contrast to May’s inflows. Meanwhile,Domestic Institutional Investors (DIIs) are actively buying,injecting Rs 44,144 crore into the market. This persistent domestic buying is currently offsetting the FII selling pressure, stabilizing the market. High valuations and geopolitical tensions are influencing FII caution. Read more at News Directory 3 to unpack the contrasting investment strategies, the impact of bond yields, and the influence of global events on the financial landscape. Discover what’s next for the Indian equity market.
Domestic Buying Offsets Foreign Selling in Indian Equities
Updated June 15, 2025
Foreign institutional investors (FIIs) have shifted from a buying to a selling position in Indian equities this month. Exchange data indicates FIIs sold Rs 4,892 crore worth of equities in the cash market thru June 13, a reversal from their Rs 19,860 crore investment in May. This shift highlights changing sentiments regarding the Indian market.
Though, domestic institutional investors (DIIs) have consistently bought equities, purchasing Rs 44,144 crore so far in June. This sustained buying has counteracted FII outflows, providing stability to the markets. The contrasting strategies of foreign and domestic investors are shaping the current market landscape.
Dr. V.K. Vijayakumar, chief investment strategist at Geojit Financial Services, noted the divergent trends. ”The dominant trend in the market so far in June is the inconsistent activity of FIIs alternating between buying and selling, while DIIs have been consistent buyers every single day,” Vijayakumar said.He added that “FII selling is getting completely eclipsed by DII buying keeping the market resilient.”
Despite the selling pressure from FIIs, benchmark indices have remained relatively stable. The Sensex is down only 0.4% in June,and the Nifty 50 has slipped 0.13%, largely due to strong domestic flows. This resilience underscores the impact of DII buying in maintaining market equilibrium.
Valuations and bond Yields Impacting FII Strategy
High market valuations and global macro uncertainties, including firm U.S. bond yields, appear to be driving FII caution. India’s 10-year benchmark yield has fallen over 50 basis points this year to around 6.2%,while the 5-year yield has declined 80 bps. This has narrowed the Indo-U.S. bond yield differential to a 21-year low of around 170 basis points, making Indian debt less attractive to global investors. This impacts foreign institutional investors.
Vijayakumar stated that FIIs have been consistently selling in the debt market due to the low differential between Indian and U.S. bond yields. He added, “With inflation and interest rates trending lower in India, bond yields remain under pressure.”
Geopolitical Risk Adds Pressure
Geopolitical tensions, such as the recent airstrikes between Israel and Iran, have intensified the risk-off sentiment. Fears of a wider conflict are impacting global markets,potentially further affecting FII flows in the coming days. The interplay of these factors creates a complex surroundings for Indian equities and foreign institutional investors.
What’s next
Market analysts will be closely watching FII and DII activity in the coming weeks to gauge the long-term impact on Indian equities. The interplay between domestic and global factors will likely determine market trends in the near future.