DIIs Power Sharp Rebound with ₹2,610 Cr Inflow as Nifty Reclaims 22,750 Despite Continued FII Selling
Market Snapshot
Dalal Street witnessed a spirited turnaround on Monday, October 26, 2026, as benchmark indices staged an intraday rally to halt a four-day losing run. After a negative opening triggered by elevated crude oil prices and global geopolitical jitters, strong domestic support spurred a reversal across broader equities.
The key benchmark levels at the close of trading:
- BSE Sensex: 73,606.75, up 482.92 points (+0.66%), recovering more than 1,090 points from an intraday low of 72,514.57.
- NSE Nifty 50: 22,753.20, gaining 153.20 points (+0.68%), after climbing back from an intraday low of 22,387.35.
- Sectoral Leaders: Pharmaceuticals, Healthcare, and Metals outperformed, with stocks like Dr. Reddy's Laboratories (+6.62%) and JSW Steel (+6.28%) spearheading the rally.
- Key Laggards: Consumer Durables, FMCG, and select financials faced selling pressure, with Shriram Finance falling 4.62%.
Institutional Flows: Cash Market
According to provisional exchange data for October 26, 2026, Domestic Institutional Investors (DIIs) stepped up as substantial buyers, countering the persistent outflows from Foreign Institutional Investors (FIIs).
The provisional cash-market breakdown:
- Foreign Institutional Investors (FIIs):
- Gross Purchases: ₹9,324.90 crore
- Gross Sales: ₹10,787.39 crore
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Net Cash Flow: -₹1,462.49 crore (Net Sellers)
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Domestic Institutional Investors (DIIs):
- Gross Purchases: ₹17,389.57 crore
- Gross Sales: ₹14,780.00 crore
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Net Cash Flow: +₹2,609.57 crore (Net Buyers)
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Combined Net Institutional Inflow: +₹1,147.08 crore
The robust domestic inflow of over ₹2,600 crore underscored the stabilizing role played by domestic mutual funds and insurers, absorbing heavy overseas supply and cushioning the market from deeper corrections.
Derivatives Market Activity
In the Futures & Options (F&O) segment, institutional positioning reflected tactical adjustments alongside a prevailing defensive bias:
- FII Index Futures: FIIs recorded a net buy value of ₹444.80 crore on the day, adding approximately 2,283 long contracts. However, their cumulative posture remained heavily defensive, holding an aggregate net short position of 2,80,183 contracts in index futures.
- FII Index Options: FIIs registered a net outflow of ₹7,789.97 crore in index options, driven by unwinding and hedging adjustments around key index strike prices ahead of the weekly derivatives cycle.
- Futures Open Interest: Near-month Nifty futures closed at 22,774.80, trading at a slight premium to the spot index, reflecting short-covering and intraday long additions as the index reclaimed the 22,700 mark.
Key Drivers and Outlook
The intraday recovery highlighted resilience in domestic liquidity against adverse external headwinds:
- Earnings Season Divergence: Quarterly results (Q2 FY27) continued to drive stock-specific action. Pharma and metal majors saw solid accumulation following resilient operating performance, whereas earnings misses in select NBFCs triggered targeted profit-taking.
- Macro and Geopolitical Watch: While Brent crude hovering above elevated levels and caution ahead of the US Federal Reserve's policy decision kept foreign investors restrained, persistent retail SIP inflows gave domestic institutions the dry powder to absorb foreign sales.
- Technical Outlook: Analysts note that Nifty sustaining above the 22,600–22,700 band is essential for confirming further upward continuation. Immediate overhead resistance is placed around 22,800–22,850, while the 22,400–22,380 zone will act as strong short-term support.
