New Delhi. The massive selling by foreign institutional investors (FIIs) in India is going to reduce soon, as the valuation of large-caps has also come down from high levels. Stock market watchers said on Saturday that FIIs are buying IT stocks. This is bringing flexibility to IT stocks. They say that despite the selling by FIIs, banking stocks remain strong, the main reason for which is the buying by domestic institutional investors (DIIs).

FIIs continued to sell in November as well. After selling equities worth Rs 1,13,858 crore through exchanges in October, FIIs have sold equities worth Rs 41,872 crore through exchanges this month (till November 22). FIIs' buying trend through primary markets (IPOs) also continued with purchases worth Rs 15,339 crore in November.

Why is there selling?
Total FII selling through the exchanges during the period from October 1 to November 23 was Rs 1,55,730 crore. Vinod Nair, Head of Research, at Geojit Financial Services, said, "This is the kind of selling that happens in the year when FIIs are in a selling mood." There are three major factors behind this heavy selling by FIIs. First, the 'sell India, buy China' business. Second, concerns about FY25 earnings. The third factor is the 'Trump business'. Of these three, the 'sell India, buy China' business has ended. The Trump business also appears to be in its final stages as valuations in the US have reached high levels.

According to Rohit Agarwal, CEO, of Funds Business, Dovetail Capital, “The recent measures taken by SEBI enhance market stability and play a vital role in protecting the interests of investors, making the derivatives market more resilient.”

Dependence on the Trump administration
Some FII selling in the secondary market is being balanced by buying in the primary market through large IPOs such as Swiggy and Hyundai. It is expected that FIIs will reduce their selling as the calendar year-end approaches. "New allocations or significant investments are likely once there is more clarity on the policies of the Trump administration," said Vipul Bhowar, senior director, of listed investments, at Waterfield Advisors. Experts said upcoming large IPOs could boost investments in the primary market in the short term, but ongoing interest will depend on macroeconomic stability and corporate earnings performance.