What it means
Foreign investors, officially called foreign portfolio investors (FPIs), bring money in from abroad and are sensitive to the rupee, US interest rates and global appetite for risk. Domestic institutions are Indian mutual funds, insurers and pension funds, fed by steady monthly savings. The exchanges publish each group's net buying or selling after every session.
In practice
The daily figures show who was behind a move. Sustained foreign buying has driven many of the market's strongest rallies, and heavy foreign selling many of its falls. In recent years steady domestic buying has often absorbed foreign selling and softened the declines.
Traders read the trend over weeks, not a single day, and compare the cash market figures with foreign positions in index futures for a fuller picture.
What to watch for
The numbers arrive after the market has closed and describe what has already happened. One day's figure can be distorted by a single large block deal or an index rebalancing, so it says little alone.
Related terms
4 terms- InstitutionA large professional participant, such as a pension fund, hedge fund or bank, that trades huge size.
- USD/INRThe exchange rate between the US dollar and the Indian rupee: how many rupees one dollar costs.
- Nifty 50The benchmark index of India's National Stock Exchange, tracking 50 of the largest companies listed on it.
- Safe havenAssets investors run to when scared, like gold, the yen and the Swiss franc (risk-off); the opposite mood is risk-on.