FII's versus DII's trading activity

[chetanbang]

Foreign institutional investors have been net sellers since past 2 weeks, but domestic institional investors are still buying. aren't dii's making losses? infact today fii's sold 1440.55 and dii's bought 385.01. if you see the trading history of fii's and dii's on http://nseindia.com/content/equities/eq_fii_nsebse.htm you can clearly notice they always do the opposite of each other. definitely fii's seem wiser at the moment. what do dii's think they are doing?

 

[aryan.]

You are right, DII's are making losses.

DII's did the same thing in 2008, when FII's where selling everything, DII's were buying everything. All the Indian mutual funds reported huge losses in 2008.

 

[sln1941]

My feeling is that DIIs are more inteligent today than FIIs and are building up stocks when the price is low. The results will be shown soon when the bulls take over. Bears have had their days and will last for a few more days but their days are numbered. Let us think positive and when we all think positive so will it turn out.

 

[PGDIMES]

Most of the DIIs are net gainers.

We can't compare the fund management business on a yearly chart. When the DIIs were buying in 2008, they had the idea that the Indian consumption story is not coming to an end in near future and as the world economies will begin to get healthy, India will outperform.

The FIIs were net sellers in 2008 as they had to meet obligations in their home turf.

When QE1 and QE2 came, the Indian market along with other emerging countries outperform the developed markets. It was again bolstered by the tax cuts and other advantages given by the governments of the respective countries.

But the year of 2010 saw very little investment by the MFs as they had huge redemption pressure. Why so? Simply put, the investors who put their money in the market in 2006, 2007 or in the initial months of 2008, have seen huge erosion in the value of their investment in the 2nd half of 2008 and early 2009. So they were eagerly waiting for the levels at which they invested and took their money back.

Then why did our market rise in 2010? The FIIs with cheap source of money(as the interest rates in US, UK and other developed countries were kept at the historical lows) flooded the Indian market and other developing countries. So we saw the typical 'pump and dump' in action.

Now as our market is coming down along with all other markets, we will see very good values in some stocks(as well as the whole market) which will hugely outperform others in the near future. Moreover India is a typical growth story rather than a value story... So it has more potential than the other comparable markets...

 

[aryan.]

My feeling is that DIIs are more inteligent today than FIIs and are building up stocks when the price is low.

Why were the intelligent DIIs selling stocks when the market went up 550 points??

Net position of DIIs and FIIs today.

 

[chetanbang]

i think in the last hour of trade yesterday, dii's took the market up. at the cost of their clients money dii's want to fight fii's for thrill.

 

[aryan.]

i think in the last hour of trade yesterday, dii's took the market up. at the cost of their clients money dii's want to fight fii's for thrill.

DIIs keep fighting but they ultimately lose.

Check out the FII and DII activity

 

[travi]

Graphically & statistically and through pure data analysis it can be concluded that :
◾FIIs have remained long term buyers in equity and equity trading is their main focus.
◾Index futures are the preferred trading tool
◾Index futures are traded in the direction of equity position rather than against it
◾Stock futures are used as hedging tool and normally FII position in them remain against their position in Index futures and equity.
◾FIIs position in Index future influences NIFTY movement the most, followed by their position in equity.
◾Large part of the retail/other segment (non FII/DII) trade in the opposite direction of the FIIs.

source of data from a well written blog