Sensex Today | Stock Market View: Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services



Sustained FII selling in May so far has taken the total FII sell figure to Rs 33540 crores and the sustained DII buying has taken the total DII buy figure to Rs 26500 crores. Because of this balancing of the FII selling with DII buying, the market has not moved much, though it has been highly volatile. Nifty is down only 0.25 % in the last one month.

The overarching factor driving the FII selling is the outperformance of Chinese stocks which are witnessing a rebound from beaten down valuations. The Hang Seng index is up by 14.90% in the last one month. FIIs invest in Chinese H stocks listed in Hang Seng. So long as this outperformance of Chinese stocks sustain, FIIs may continue to sell in India.

A clear change in the market direction will happen when clarity emerges on the election results in India. A high probability is DIIs, HNIs and retail investors buying aggressively if the election results are favourable from the market perspective. Such aggressive buying can put the FIIs on the back foot.

FIIs-heavy largecaps will continue to be weak and this will be an opportunity for investors to accumulate them.