FIIs are here to stay as they are aware of India's growth story

Time was when the country's capital market had started limping due to the severe Covid-19 crisis until few months back. It was then the Foreign Institutional Investors (FIIs) entered the scene and provided a cushion through investment in equities in a big way. With the FIIs buying equities of over Rs 1 lakh crore over a period of 52 days, until December 21, suddenly they changed the tack and turned out to be net sellers.

It brought a twist to the foreign capital flow. To elaborate upon it, the FIIs, which had been net buyers for more than one-and-a-half month in a row, turned sellers all of a sudden on the eve of Christmas.

Of course, it was in contrast to the FIIs' buying behaviour. The fact that in November alone, FIIs had purchased equity worth Rs 65,317 crore, However, on Monday (December 21) being the first day when FIIs reported negative figure of Rs 323.55 crore on the front of selling. Interestingly, the trend continued until the market came to a hiatus.

Even though the FIIs' buying party may be on a lull, they are here to stay as they are well aware of the India's growth story which suggests that it will be the fifth largest economy of the world by 2025.

Even the selling by the FIIs was merely around Rs 1,000 crore, which is not even a peanut when compared to their equity buying worth Rs 1 lakh crore during 1.5 months.

Still, FIIs have been nonchalant on the front of debt. They have been buying only equities in the capital market.

The reason is not far to seek. The Indian currency has started weakening against the greenback. Whenever it happens, FIIs lose their interest in debt instrument. The harsh truth is that FIIs have sold the highest debt investments during past couple of decades.

The stock market's Bull Run, riding on FIIs' buying, made the pockets of our billionaires deeper. So, no wonder if Motilal Oswal was seen on the buying spree as it bought two plush flats in the posh locality of Peddar Road on the financial capital for Rs 101 crore. When it comes to the retail investors, they continued to remain unchanged. Economy and markets tend to bend, but never to break.