Domestic institutional investors (DIIs) invested more than ₹60,000 crore in October. This is the largest investment ever made in a single month. Whereas, foreign institutional investors (FIIs) sold their equities in almost the same amount. This was also the 15th consecutive month of net buying by DIIs. DIIs have been very strong buyers of shares in the Indian stock market. In the current calendar year, they have so far invested more than Rs 4 lakh crore in the capital market.

This is the first time that DIIs have touched this level in a calendar year, while there is still more than two months left for the year to end. This strong jump in DIIs' investment has been seen at a time when foreign investors have sold heavily. Their attitude was mainly due to geo-political tensions. FPIs have sold about ₹ 68,000 crore so far in October.

Experts say that this attitude is driven by the increasing participation of retail investors through mutual funds. This is expected to continue the strength in the markets. According to Sharma, this moment will help maintain high valuations and stabilize the market even amid fluctuations in the activity of FIIs. He expressed confidence in the strength of the Indian market and encouraged the investor community to maintain their investment in Indian equities. Meanwhile, the first trillion rupees level of DII investment in 2024 was reached in 57 trading sessions, the second trillion in 40 sessions, the third trillion in 60 sessions and the fourth trillion in a record 31 sessions. India's benchmark indices Sensex and Nifty have gained more than 13% and 15% respectively this year, while the BSE Midcap and Smallcap indices have gained more than 32% and 34.5%. However, since October, both Sensex and Nifty have fallen by 3.3%. This is the first decline since May 2024 and the sharpest fall since December 2022. According to Deepak Jasani, Head of Retail Research at HDFC Securities, constant equity flow in mutual funds every month, profit booking and cash raised by fund managers due to their cautious attitude have helped domestic institutions to buy equities on days of decline or when there is a correction in the market. Many times their purchases increase to compensate for the selling of FPIs. So far in the current calendar year, FIIs have invested about ₹32,776 crore in the Indian equity market. However, October has seen massive selling by FPIs, mainly due to geo-political tensions. Apart from this, on the domestic front, the decline in corporate earnings of companies in the second quarter further weakened investor sentiment. Some investors also speculate that with the rise in the stock markets of China and Hong Kong after economic stimulus measures, FIIs may continue to sell in the Indian markets due to high valuations. Vinod Nair, Head of Research, Geojit Financial Services, said, "We maintain a cautious stance in the short term due to the risk of decline in corporate earnings, as the current second quarter results are expected to be sluggish. Due to lack of improvement in government spending, rural and global demand, profit improvement is below average. Apart from this, due to high inflation rate at the global level, the operation margin is getting affected. The Indian market is likely to perform poorly due to consolidation of premium valuations, which it was benefiting from since 2021. "