Mumbai, May 23:
Indian equities closed sharply lower on Thursday, weighed down by intense foreign institutional investor (FII) selling across segments. The Nifty 50 fell 203.75 points or 0.8% to end at 24,609.70, while the BSE Sensex plunged 644.64 points to 80,951.99, also a loss of 0.8%.
The volatility index, India VIX, eased by 1.7% to 17.26, signaling relatively stable market expectations despite the steep decline in headline indices.
FII Exodus Pressures Markets
FIIs were net sellers across the board, dumping equities and derivatives worth thousands of crores. In the cash market alone, FIIs sold shares worth ₹5,045.36 crore. The bearish sentiment extended to derivatives, with FIIs pulling out ₹3,169.25 crore from index futures and ₹3,460.80 crore from stock futures. A staggering ₹45,529.13 crore was offloaded in index options, indicating aggressive hedging or unwinding of bullish positions.
In contrast, domestic institutional investors (DIIs) continued to lend support, turning net buyers in the cash segment with inflows of ₹3,715 crore. However, this was insufficient to offset the FII-driven pressure.
Weekly Volatility and Flows
The week has seen volatile swings and shifting institutional stances. After a strong close on Wednesday, when the Sensex gained over 400 points, Thursday's plunge marked a sharp reversal. The drastic FII outflows follow a mixed pattern seen earlier in the week, where Tuesday also saw heavy FII selling (₹10,016 crore), dragging markets lower.
Outlook
Analysts believe the current volatility is linked to global uncertainties, election-related jitters, and profit booking after recent highs. "The massive sell-off in index options by FIIs could be a signal of either aggressive repositioning or heightened caution," said a market strategist.
Markets may continue to remain choppy in the near term as investors await cues from macroeconomic data, corporate earnings, and global developments.
Key Indicators – May 22, 2025:
Nifty 50: 24,609.70 ▼203.75 (–0.8%)
Sensex: 80,951.99 ▼644.64 (–0.8%)
India VIX: 17.26 ▼0.29 (–1.7%)
FII Net Outflow (Cash): ₹5,045.36 crore
DII Net Inflow (Cash): ₹3,715 crore
FII Derivatives Activity:
Index Futures: –₹3,169.25 crore
Index Options: –₹45,529.13 crore
Stock Futures: –₹3,460.80 crore
Stock Options: –₹3,483.26 crore.
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