FII sold Rs 176.5-crore Indian shares on Monday, outflow lowest in over a month

Foreign institutional investors sold Indian shares worth a net Rs 176.5 crore on Monday, provisional exchange data showed. That marked the lowest FII outflow from Indian shares in more than a month, bringing some relief to Dalal Street investors.

Net buys by domestic institutional investors (DIIs) - which have been net purchasers for the past few months - stood at Rs 1,098.6 crore on Monday.

Sustained buying by DIIs has been saving headline indices from deeper cuts since October when both Sensex and Nifty50 scaled the last of a multitude of all-time highs in a near one-sided 18-month-long rally.

As of March 14, FIIs have already pulled out Rs 43,479.6 crore from Indian shares for the month, data shows, though DIIs have made net purchases to the tune of Rs 31,427.7 crore.

Market veteran Raamdeo Agrawal told CNBC-TV18 last week that FIIs will have a painful entry once they intend to return to Indian equities.

"What is happening in the stock market front is more than a billion-dollar daily selling by FIIs. That is the real world for us. We have to face that every day. I think we have faced that brilliantly," said Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services.

Here's how the daily net flows have been like for Indian shares in the recent past:

Market expert Ajay Bagga told CNBCTV18.com that a large part of FII selling is in financial stocks, where valuations are approaching compelling levels. "Once that selling tapers out, we will see a bottom forming and then an up move," he said last week.