FII and DII Trading activity – May 2020
FII and DII Trading activity – May 2020
Most indices of the World Stock Market were up in April and May 2020, after the Biggest crash happened in the month of March. One can ask how the Stock Market is booming so rapidly in this current Economy.
Yes, it's absolutely a Recession Period. If we look at the history of the World Markets in the Past, there has not been much investment inflows. And there is no other Government raised its debt to stimulate the Economy before 2008 Global Financial Crisis.
Now, every country is looking to stimulate with a Huge Debt or Cash. Developed nations are interested to print more money (Risk is there) to promote their Country's economy. These are the positive things for the Stock Market.
However the current boom is said to be a Bear Market Rally. Even if the Stock Market beats it's life time high in the near term, the Real Economy takes time from months to years to recover from the Current downturn.
Currently, the Unemployment rate has increased. We don't know about how the Migrants are moving their life and impact with the Economy. Banks and NBFC problems are not immediately resolved. Stock Indices may rise in the hopes of fixing the economy.
This is what happened in the April and May 2020. As we have already discussed that the Q1FY21 numbers are a crucial one for the Companies and Country's GDP. So, it will determine the next move in the Stocks.
Rather than predicting the Stock Market trend, it is better to look out the Stocks based on Fundamentals. One can consider the Country's economic growth and underlying Financial statements of listed companies.
For the month of May 2020, there are 19 trading days for the Indian Stock Market. 6 out of 19 trading days, the Foreign Institutional investors were the Net buyers and 7 out of total trading days, the Domestic investors were the Net Sellers.
However, the FII were the Net buyers on shares of worth Rs. 13,914 Crore which is higher than the Domestic investors. The DII had bought net purchase of Rs. 12,293 Crore for the month of May 2020.
The Gross purchase for Foreign investors were stood at 1,55,977 Crore for the month of May 2020. The sold shares of worth Rs. 1,42,062 Crore. On the other hand, the Domestic investors had bought shares of worth Rs. 87,531 Crore and sold shares of Rs. 75,238 Crore.
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