Does FII selling move the Nifty? Two years of daily data

The question

Every evening NSE publishes how much foreign and domestic institutions bought and sold. Every morning the headlines connect the two: "Nifty falls as FIIs sell." Is that a real relationship, and is it any use?

We matched NSE's daily FII and DII net figures with the Nifty 50's daily close for every trading day from 10 September 2024 to 1 October 2026, 510 days in all. All flows are NSE's provisional cash-market numbers in ₹ crore, the same series as our FII and DII data page.

Same day: yes, a real link

FIIs were net sellers on 359 days and net buyers on 151.

Sorted into five equal groups by the size of the day's FII flow, the pattern is steady:

On the ten largest FII selling days of the period, the Nifty 50 fell every time, by 0.28% to 2.60%. The largest, a net sale of ₹21,106 crore on 29 May 2026, came with a 1.50% fall.

The correlation between a day's FII flow and that day's Nifty return was 0.42: clearly there, far from tight.

Next day: nothing

The right-hand column above is the one that matters to anyone hoping to use the numbers. After the heaviest selling days the Nifty 50's next-day move averaged +0.06%. After the heaviest buying days, also +0.06%. Across all days the correlation between FII flow and the next day's return was −0.01.

The figures come out after the market closes, and by the next morning they say nothing about the day ahead.

Which way does it run?

A same-day link does not say who moved whom. One clue: a day's FII flow was also correlated with the previous day's Nifty move, at 0.28. Foreign investors tended to buy after the market had risen and sell after it had fallen. Part of the relationship is flows following prices, not leading them.

Month by month

Over the 24 full months from October 2024 to September 2026, the monthly correlation between FII net flow and the Nifty 50's return was 0.63.

• FIIs were net sellers in 20 of the 24 months. The Nifty 50 still rose in 6 of them.
• They were net buyers in 4 months, March to June 2025, and the Nifty 50 rose in all four.
• The sharpest exception was April 2026: a net FII sale of ₹70,136 crore and a 7.46% rise in the Nifty 50, the rebound from the March low.

The other side of every trade

Domestic institutions moved almost exactly opposite. The daily correlation between FII and DII net flows was −0.70, and on each of the ten biggest FII selling days DIIs were net buyers, of ₹6,738 crore to ₹16,764 crore. Over the whole period FIIs sold a net ₹8,82,642 crore and DIIs bought ₹16,46,215 crore.

Every rupee FIIs sold was bought by someone, and over these two years that was mostly domestic institutions: mutual funds, insurers, banks and pension funds. Our post on DII buying in 2026 follows that money.

What this does not tell you

• Provisional figures. NSE's daily numbers cover the cash market only and are later revised.
• Two years, one regime. These were two years of almost continuous foreign selling. The relationship may look different when FIIs are buying.
• No trading signal. A link that vanishes by the next morning is a description, not a strategy.

For the latest quarter in detail, see FII and DII flows in Q3 2026 and the ten biggest FII selling days of 2026.