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Market Snapshot

The Indian equity markets staged a resilient comeback on Thursday, ending a period of sharp declines that had previously erased significant investor wealth. The BSE Sensex closed at 82,307.37, up 397.74 points or 0.49%, while the NSE Nifty 50 settled at 25,289.90, gaining 132.40 points or 0.53%. The recovery was broad-based, with the Nifty Midcap 100 outperforming the benchmarks by rising 1.34%.

Institutional Flows: Cash Market

The tug-of-war between foreign and domestic institutions continued, though the scale tilted in favor of the bulls today.

• Foreign Institutional Investors (FIIs): Remained net sellers in the provisional cash market segment, offloading equities worth ₹2,549.80 crore.
• Domestic Institutional Investors (DIIs): Acted as the primary market support, recording a net purchase of ₹4,223.00 crore.

This divergence continues a month-long trend where DIIs have consistently absorbed the selling pressure exerted by foreign portfolios, preventing a deeper correction in the benchmarks.

Derivatives Market Activity

Derivative data for the January 22 session reflected a cautious but improving sentiment. The Nifty Put-Call Ratio (PCR) saw a slight improvement to 0.78, up from 0.72, signaling that traders are beginning to cover short positions.

• Volatility Index: The India VIX, a measure of market fear, eased by 3.12% to settle at 13.35, indicating a reduction in near-term uncertainty.
• Positioning: FII positioning in index derivatives remained mixed, characterized largely by hedging activity rather than aggressive directional bets.
• Sectoral Performance: PSU Banks and Media led the charge, with both indices gaining over 2%. Conversely, Reality and Consumer Durables sectors ended the day as laggards.

Key Drivers and Outlook

The market sentiment was primarily lifted by a "risk-on" environment globally. U.S. President Donald Trump’s decision to dial back tariff threats against European nations and his optimistic remarks regarding a potential "great" trade deal with India acted as major catalysts. Additionally, technical support near the 200-day moving average (DMA) for the Nifty (around 25,100) encouraged value buying at lower levels.

Looking ahead, the market remains in a consolidation phase. While global relief and domestic liquidity provide a floor, the upside may remain capped by ongoing FII selling and the upcoming Union Budget FY27, which investors are closely watching for fiscal cues.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: ** FII DII Stock Market Institutional Investors Nifty Sensex