FIIs Sell ₹3,112 Crore in Indian Equities, DIIs Invest ₹8,930 Crore on September 4

Foreign institutional investors (FIIs) remained cautious toward Indian equities on Friday, September 4, while domestic institutional investors (DIIs) stepped up their purchases. The contrasting investment patterns provided important support to the domestic market even as foreign investors continued to reduce their exposure to Indian shares.

According to NSE trading data cited in the latest market update, FIIs recorded net selling of ₹3,111.94 crore during Friday's session. Their total purchases stood at ₹13,857.58 crore, while sales were significantly higher at ₹16,969.52 crore.

Domestic institutions moved in the opposite direction. DIIs purchased equities worth ₹19,254.19 crore and sold shares worth ₹10,324.07 crore, resulting in net buying of ₹8,930.12 crore.

The sizeable domestic buying helped offset the pressure created by foreign selling and came on a day when benchmark indices managed to recover from their recent weakness.

FIIs Remain Cautious

Friday's selling marked another session of uneven foreign investor participation in the Indian cash market. FIIs have been net buyers on only two of the first four trading sessions of September.

Despite Friday's outflow, FIIs' cumulative position for the month remained positive. Their net investment in Indian equities during September stood at ₹2,373.94 crore as of September 4.

The broader year-to-date picture, however, remains considerably more negative. Based on NSE data covering FII/FPI activity, foreign investors have withdrawn around ₹3.57 lakh crore from the cash market so far in 2026.

This continuing selling trend has remained an important factor for investors watching the direction of Indian equities, particularly because large foreign flows can influence liquidity and short-term market sentiment.

DIIs Provide Strong Domestic Support

Domestic institutional investors have increasingly played a major role in absorbing selling pressure in the Indian market.

Their ₹8,930.12 crore net purchase on Friday took their cumulative net investment for September to ₹18,567.50 crore. This provided a substantial counterbalance to the day's foreign outflows.

The year-to-date figures underline the difference between the two investor groups. While FIIs have been significant net sellers, DIIs have invested approximately ₹5.82 lakh crore in the Indian cash market during 2026.

The strong domestic participation indicates that local institutional demand continues to provide a cushion when overseas investors reduce their exposure.

Indian Markets Recover

The institutional flow data came against the backdrop of a modest recovery in Indian benchmark indices.

The Nifty 50 ended Friday at 23,898, gaining around 0.1%. The Sensex performed somewhat better, adding about 0.5% during the session.

The recovery was notable because both benchmarks had been under pressure in the preceding sessions. Friday's gains brought some relief after four consecutive sessions of declines.

Improving global cues and reduced expectations of an imminent US Federal Reserve rate hike supported market sentiment during the session. However, investors continued to monitor external risks, particularly movements in crude oil and the currency market.

Crude Oil and Rupee Remain Important

Oil prices continued to be a key factor for Indian markets. Brent crude was trading at around $95.4 per barrel, keeping energy costs elevated for an economy that relies heavily on imported crude.

Higher oil prices can have wider implications for India's inflation outlook, import bill and currency stability. Consequently, movements in crude remain closely watched by equity investors and institutional funds.

The Indian rupee, meanwhile, strengthened to around ₹94.4 against the US dollar during Friday's session. Currency movements are particularly relevant for foreign investors because changes in the rupee can affect the value of their investments when converted back into their home currencies.

What the Institutional Flows Signal

The latest data highlights a continuing divergence between foreign and domestic investors. FIIs are still showing caution despite the broader September figures remaining positive, while DIIs are maintaining strong buying interest.

For the market, this domestic institutional support is significant because it can help limit the impact of overseas selling. At the same time, sustained FII outflows remain a factor that could influence market volatility in the near term.

Investors will therefore be watching upcoming trading sessions closely for signs of whether foreign investors return to buying or extend their selling activity.

For now, the September 4 session presented a clear contrast: foreign institutions were net sellers of more than ₹3,100 crore, while domestic institutions absorbed considerably more shares than they sold, recording nearly ₹8,930 crore in net purchases.