DIIs Pump In Nearly Rs 1 Lakh Crore In Equities During Volatile Election Months
Mutual funds bought shares worth Rs 80,842 crore, representing nearly 81% of total domestic inflows between April 1 and June 5.
The two months of election-driven volatility in Indian equity markets in April and May failed to deter domestic institutional investors whose risk appetite remained high, even as foreign funds took a cautious exit.
Domestic investors bought equities worth Rs 99,611 crore between April 1 and June 5, according to NSE data compiled by NDTV Profit. DIIs were net sellers in just five trading sessions during this period. On the other hand, foreign institutional investors offloaded Indian equities worth Rs 89,148 crore.
Equity markets surged in early April ahead of the polling amid expectations of the BJP's third consecutive election victory. It soon faced pressure as investor sentiment took a hit due to lower voter turnout in the initial phases, casting doubt on the BJP's electoral prospects.
The party had set an ambitious target of winning 370 seats in the Lok Sabha on its own and taking the count of its alliance to more than 400. Lower turnout worried observers who saw less voter enthusiasm as a reason to worry for the BJP's goals.
In the two-month period, mutual funds bought shares worth Rs 80,842 crore, according to SEBI data—representing nearly 81% of total domestic inflows. Other institutions like insurance companies, banks and pension funds infused Rs 18,769 crore.
Mutual funds saw highest-ever inflows in the month of April at Rs 2.39 lakh crore, led by debt schemes. The net asset under management rose after a fall in the previous month, according to data from the Association of Mutual Funds.
Market volatility read through the so-called 'Fear Gauge' rose to the high of 26.75 on June 4 (the day the results were announced) and had hit a low of 10.2 on April 23. The India VIX saw a nearly 40% jump since the start of April.
