Domestic institutional investors (DIIs) have continued to be active buyers in the Indian stock market in the first quarter of 2026 so far, despite the benchmark Nifty 50 witnessing declines. In March 2026, DIIs acquired equities valued at ₹32,786.92 crore in the cash market as per exchange data, while the index closed at 24,450.45, reflecting a decrease of 2.9% for the month.
India’s mutual fund sector, has consistently shown monthly SIP inflows exceeding ₹30,000 crore, demonstrating ongoing domestic involvement despite the fluctuations in the equity markets in early 2026. The Association of Mutual Funds in India has published data indicating that systematic investment contributions remain robust, even as the indices fluctuate and global macroeconomic conditions evolve.
Foreign Institutional Investors (FIIs) have been aggressively selling, while oil prices have surged by as much as 28.9%, reaching their highest level since mid-2022 due to the ongoing Iran conflict. The index has dropped 1.73% to a 10-month closing low of 24,028.05, with volatility spiking to a 21-month high today. Investors and market participants are questioning whether the buying activity of Domestic Institutional Investors () in the will mitigate the effects of a market crash or offer some relief.
Will DII buying cushion Stock market crash?
Going by the DIIs trends, in February 2026, they invested ₹38,423.11 crore as the Nifty 50 finished at 25,178.65, a slip of 0.6%. Likewise, in January 2026, DIIs invested ₹69,220.74 crore, even as the benchmark closed at 25,320.65, which marked a drop of 3.1%.
Exchange data indicate that DIIs invested ₹1,40,430.77 crore in 2026 thus far in the cash market, despite the benchmark Nifty 50 experiencing a decline of 6.4% down to 24,450.45.
Talking about 2025, DIIs contributed an impressive ₹7,88,184.38 crore, while the index increased by 10.5% to reach 26,129.60.
Likewise, investments amounted to ₹5,26,545.13 crore in 2024 and ₹1,84,650.24 crore in 2023, facilitating growth of 8.8% and 20%, respectively. In previous years, DIIs had invested ₹2,76,698.72 crore in 2022 and ₹94,574.91 crore in 2021.
Tushar Badjate, Managing Director, Badjate Stock & shares Pvt Ltd, explained that unlike FII flows, which are influenced by global interest rates, dollar strength and international risk sentiment, SIP money is driven by long-term household savings. Every month, mutual funds are required to deploy these inflows, creating a steady demand that cushions markets during periods of foreign selling.
As a result, Indian markets today demonstrate greater resilience and shallower corrections compared to earlier cycles. However, domestic liquidity alone cannot power the next phase of market expansion, believes Badjate.
Sunny Agrawal – Head of Fundamental Research at , opined that markets will continue to remain resilient on the back of strong inflows from DIIs.
Agrawal explained that inflows in MFs through SIP continue to be robust to the tune of approx 30,000 cr on monthly basis and this implies annual inflows of ₹3,60,000 cr. The same is being reflected in the record high deployment by DIIs in CY24 & CY25 ( ₹5.3 trillion & ₹7.9 trillion respectively) which has helped to tackle persistent FII outflow since CY21.
Further, Nitant Darekar, Research Analyst at Bonanza, believes that India has effectively transitioned from a foreign-liquidity-driven market to a domestically anchored equity regime — a structural shift we view as durable and market-stabilising.
“Steady SIP inflows, insurance allocations, and pension fund participation have collectively created a powerful domestic liquidity engine, making Indian markets far less hostage to foreign sentiment than in prior cycles,” said Darekar.
FII trends so far
FIIs have predominantly been net sellers in Indian stock markets for the past few years. In 2026 to date, FIIs have divested equities totaling ₹69,907.19 crore in the cash market as per exchange data.
In 2025, FIIs sold off an enormous ₹3.06 lakh crore, likewise, 2024 experienced net outflows of ₹3.02 lakh crore, while the Nifty 50 still advanced by 8.8%.
Overall, the ongoing foreign outflows in recent years stand in stark contrast to the robustness of Indian equity markets, which have been bolstered by domestic investments.
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