FII (Foreign Institutional Investors) refers to large investment entities based outside India that invest in Indian markets, while DII (Domestic Institutional Investors) refers to large Indian entities like mutual funds and insurance companies. Both trade in large volumes, and their daily buying/selling activity is closely tracked by market participants as a signal of institutional sentiment.
Why It’s Tracked
Because FIIs and DIIs trade in significant volume, their net buying or selling activity can meaningfully influence overall market direction, especially in the short term.
Related Reading
See how institutional flows fit into broader price movement in How Stock Prices Move: Demand, Supply, and Market Sentiment.