DIIs Pump ₹5,189 Crore to Absorb Heavy FII Outflows of ₹5,353 Crore on September 28, 2026

Market Snapshot

The Indian equity market witnessed heightened volatility on September 28, 2026, as sustained foreign portfolio liquidations collided with robust domestic institutional buying. While global sentiment remained subdued under the weight of firm U.S. bond yields and currency headwinds, domestic resilience prevented severe index capitulation.

• Benchmark indices traded under pressure, reflecting cautious sentiment in front-line heavyweights.

• Broad-market participation remained divergent, with domestic liquidity selectively supporting defensive sectors and large-cap counters.

• Market breadth reflected an ongoing tussle between overseas outflows and resilient local retail and institutional inflows.

Institutional Flows: Cash Market

According to provisional exchange data for September 28, 2026, institutional investors engaged in a decisive showdown in the cash segment:

• Foreign Institutional Investors (FIIs): Recorded net sales of ₹5,353.22 crore, continuing their aggressive selling trend seen throughout late September.

• Domestic Institutional Investors (DIIs): Recorded net purchases of ₹5,189.02 crore, nearly neutralizing the foreign outflow.

• Net Institutional Impact: Combined institutional flows settled at a marginal net outflow of ₹164.20 crore, demonstrating how deeply domestic mutual funds and insurance companies are cushioning foreign selling pressure.

The sustained domestic counter-bid underscores the structural shift in Indian capital markets, where relentless domestic retail allocations through Systematic Investment Plans (SIPs) provide mutual funds with steady cash deployment capabilities.

Derivatives Market Activity

Activity in the futures and options (F&O) segment mirrored the cautious sentiment observed in cash equities:

• Index Futures: FII positioning tilted defensive, characterized by short build-ups and unwinding of long contracts in major benchmark futures.

• Index Options: Significant open interest additions were concentrated in out-of-the-money Put options as institutional participants sought downside protection against further global shocks. Call writing at immediate resistance zones indicated limited short-term upside expectations.

• Stock Derivatives: Selective long positions were maintained in resilient pockets such as pharmaceuticals and FMCG, while banking and technology derivatives witnessed rollover hedging and net short exposure.

Key Drivers and Outlook

The institutional divergence on September 28 highlights differing asset allocation dynamics between foreign and domestic managers:

• Global Allocation Shifts: Global fund managers are continuing to reallocate tactical capital in response to elevated U.S. Treasury yields, a stronger U.S. dollar, and alternative emerging market valuations.

• Domestic Liquidity Foundation: DIIs continue to operate with robust balance sheets, fueled by record domestic mutual fund assets and consistent monthly domestic equity inflows.

• Near-Term Outlook: Analysts expect the market to remain range-bound with a defensive bias in the near term. Unless foreign portfolio selling eases, benchmark indices may struggle to break above overhead resistance levels; however, strong DII support ensures substantial downside absorption around major technical moving averages.

Tags: FII DII Stock Market Institutional Investors Nifty Sensex