Showing a reverse trend, DIIs have bought to the tune of `12,142 crore since July 21, also being net sellers on only two occasions. Up to July 20, domestic investors were net sellers of up to `11,710 crore.

“Owing to challenges with the currency and rising US bond yields, this seems to be a risk-off trade by FIIs. This FII selling has also opened an opportunity for DIIs to buy, which they have been doing,” said Naveen Kulkarni, CIO of Axis Securities.

While Fitch’s US downgrade has sent jitters across indices globally, market players have said it is unlikely to impact FII flows to India, as these are more influenced by movement in currency and the US bond yield.

For the week, the 30-share Sensex fell 438.95 points (0.66%), while the Nifty shed 129.05 points (0.66%). This was the second consecutive weekly decline recorded by the indices, after five consecutive weeks of net gains.

“The week began on a positive note, with hopes of an end to the policy tightening era due to cooling inflation worldwide. However, negative news about the US rating downgrade, weak factory activity data from the euro zone and China, and prolonged FII selling triggered by rising US bond yields caused widespread worries,” said Vinod Nair, Head of Research at Geojit Financial Services. FE