FII's are Holding the Frontiers and DII's on a Killing Spree

My Recent posts on FII vs DII positions are the below links

September 15th : 19000 crossed...Whats next for Markets
July 4th : FII and DII investments in India
May11: Buying and Selling of FII vs DII

As we are now into 20000 need to look the flow direction and it looks like the flow direction from DII side is not changed as well as flow of funds from FII side is not changed.


FII flows into Indian Market is very Strong and this led to NIFTY cross 6000 mark,as FII believed India has growth story even when the rest of world is struggling and this led to more funds coming into India.I think the same Thing happened in 2007-2008 times before we came crashing down due to liquidity crisis. And this time chance of happening the previous crisis is very less cause there is abundant liquid in market .

At the same time governments across the world(US,EU) are ready to put more work at there printing presses.Especially US going for QE2 which might increase global liquid and there is good possibility that FII might be attracted and pour money  into EM which has growth story and specifically India.But there is a small tension across the rooms of currency war brewing in some parts of world, investors need to be cautious before they go for full fledged war

DII are on selling spree for a very long time and it looks like they aren't tired for now and especially the month of October the net position is very huge on negative side

Now comes  another intresting question? who are these DII which are on selling Mode in Indian Market.

For one thing DII are local people and they know the local conditions and there companies much better than FII. But when FII are Buying mode why are these people on selling mode.Yes one can understand that valuations might be a little stretched and they dont want to take risks or they might be taking profit and churning the portfolia. 

If thats the case why Retail investors are pulling money from MF from very long time. Is it purely because of SEBI banning entry and exit loads on MF products and distributors not selling them. I strongly believe that retail investors are bit intelligent and they know the mistakes they have done in past and looks like there are redeeming there units from MF as market looks a bit stretched .I don't have Data to support this. But my friend with whom i had a heated arugment will provide data for me:).

Will post on this more some time later