Election Results: FIIs sell record ₹12,436 crore in Indian equities on Tuesday, GIFT Nifty set for higher opening

Foreign institutional investors (FIIs) sold a record ₹12,436 crore in Indian equities on Tuesday after the BJP-led National Democratic Alliance (NDA) failed to reach the figures predicted by the exit polls over the weekend. The benchmark Nifty 50 and the Sensex crashed nearly 8% during the day before closing the session nearly 6% down.

This is believed to be a record selling by FIIs. Prior to this, such a rampant sell-off was witnessed on January 17 when foreign investors sold ₹10,578 crore worth of equities in a single day on a net basis. So far in June, foreign investors have net sold equities worth ₹5,585 crore.

So far in 2024, FIIs have sold over ₹1.32 lakh crore in Indian equities on a net basis. The highest selling was witnessed in May 2024 when foreign investors sold ₹42,214 crore. The only positive month was March when foreign investors bought ₹3,314 crore on a net basis.

As far as the futures market is concerned, foreign investors appear to continue their bearish stance. On Tuesday, FIIs added net short positions of 1.58 lakh contracts valued at ₹9,843 crore.

Significant selling was seen across public sector unit stocks on Tuesday in the wake of the election results. REC lost almost a quarter of its market cap having closed 24.07% lower on Tuesday. Other PSU stocks like PFC, Power Grid, NTPC, and NALCO also posted significant losses.

On Wednesday, the Gift Nifty index is indicating a gap-up opening for the Nifty 50 by almost 130 points.

Meanwhile, the Nifty Bank index has its expiry on Wednesday. Option prices are significantly high given India VIX having closed nearly 28% higher at 26.75. At one point, the index was up over 41% to hit as high as 31.71 on Tuesday. This is the highest level seen since February 2022. India VIX is an index that reflects the anticipated volatility in the market over the next 30 days