FII vs DII: who moves the Indian stock market?

Foreign institutional investors (FIIs) are overseas funds -- pension funds, hedge funds, sovereign wealth funds -- that buy and sell Indian stocks through registered custodians. Domestic institutional investors (DIIs) are India-based funds: mutual funds, insurance companies like LIC, and pension funds such as EPFO. NSE publishes each day's net buying or selling by both groups after market close.

FIIs tend to move in and out of India based on global factors -- US interest rates, the dollar, and risk appetite worldwide -- so their flows can swing quickly. DII flows, heavily driven by retail SIP money flowing into mutual funds, have been steadier and have repeatedly offset FII selling in recent years. Watching both side by side, as in the table above, shows whether a weak day was broad-based selling or just one group stepping back while the other kept buying.