FIIs & DIIs Pump ₹11,000 Cr: Is a Bull Run Starting?

There was a rare display of financial muscle in Dalal Street on November 26 (Wednesday). The bears were caught off guard as the heavyweights (both domestic and international) turned aggressive buyers. The powerful buying stance led the market into a bull run.

The provisional exchange data states that the FIIs (Foreign Institutional Investors) continued their net buying streak. The FIIs bought Indian equities worth ₹4,778 cr. However, the DIIs (Domestic Institutional Investors) outpaced the FIIs, and net purchased shares worth ₹6,248 cr.

There was a combined inflow of >₹11,000 cr in a single trading session. Typically, DIIs act as a counterbalance to FII selling. They operate to smooth out volatility. However, the DII and FII buying together created a "double liquidity" effect.

The indices were propelled through critical resistance levels. The buying move is coming just a day before the November monthly expiry. Thus, smart money might be positioning for a decisive move.

So, with >₹11,000 cr entering the system in a single day, there is an important question for every trader. Is this the beginning of a sustained pre-election rally? Or is the rally just a one-day wonder driven by expiry adjustments?

The Sudden FII Comeback

For months, the narrative of the stock market cycle has been dominated by FII selling. High US bond yields and geopolitical uncertainty drove the stock market swing.

The buying on November 26 has marked a potential pivot. The magnitude of the purchase suggests that the buying spree is a high-conviction allocation.

Several global factors have likely aligned to trigger this risk-on sentiment. With the softening of the dollar index and the cooling of the US Treasury yields, emerging markets like India immediately become more attractive to dollar-denominated investors.

Recently, the FIIs, who have been "underweight" in India relative to other Asian peers, might be rushing to close the gap as the year-end approaches.

This FIIs buying has created a virtuous cycle. FIIs, with their return, have targeted large-cap heavyweights in banking and technology, and lifted the entire index. Thus, the overall market sentiment has improved. However, while FIIs can be notoriously fickle, can the domestic puzzle continue to provide such massive support?

DIIs Hold the Fort

So far, in 2025, DIIs have net bought shares worth ₹6.98 lakh cr. On November 26, the ₹6,248 cr purchase is a testament to the sheer firepower of India's mutual funds and insurance companies. The buying spree is the aggregate power of millions of retail SIPs (Systematic Investment Plans) hitting the market.

This relentless domestic inflow has created a "price floor" for Indian equities. Even when global cues had turned sour, DIIs have consistently stepped in to absorb the supply.

On November 26, the DIIs aggressively chased prices higher alongside the FIIs. This can suggest that domestic fund managers are sitting on considerable cash piles. Also, during dips or consolidation phases, the fund managers might be deploying them strategically.

The behaviour of DIIs is also signalling confidence in the long-term structural story of India. The FIIs trade on global macro cues. However, the DIIs trade on domestic earnings growth and consumption themes.

The aggressive buying by DIIs can be an indication that, regardless of the short-term volatility, they see value at current levels.

Can Both Engines Fire Together?

Historically, days when both FIIs and DIIs are net buyers of this magnitude are rare and can mark the start of a trend.

This "double engine" liquidity can remove the friction from the market. Usually, when one is buying and the other is selling, the market can move sideways. However, as both buy, the market tends to trend vertically.

Thus, a synchronised buying day suggests a broad-based rally where participation widens beyond just a few index heavyweights.

Source

Moneycontrol