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Tuesday, July 5, 2011

FII and DII at loggerheads

If we analyze the institutional inflows data, we find that FII (Foreign Institutional Investors) and DII (Domestic Institutional Investors) never work in tandem;
When FIIs sell, DIIs do the buying and the vice versa.

When FIIs are net negative buyer (negative difference between buy amount and sell amount), DIIs are net positive buyers (positive difference between buy amount and sell amount) and the vice versa.

FII and DII Behaviour
Only 24% of time both foreign and domestic institutions were both either  net buyers or net sellers and rest 76% of times when FII s were net buyers, DIIs were net sellers and the reverse.

This contradictory behaviour of institutions protects the market from major fall but on the other side it hinders the major up move too.

PS: Inflows data under consideration- Nov 2009 to till date.


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