Quick, what is common to the years 2014 and 2017.Apart from hosting big, landmark elections, the two years have been notable for record stock market performances.

In 2014, the year Narendra Modi became the prime minister, the Sensex soared 30.08 per cent.In 2017, when the Bharatiya Janata Party (BJP) won big in Uttar Pradesh (UP) and a new national indirect tax was rolled out, the Sensex has so far risen 18.78 per cent.



But one major divergence between the two years is the cause, the reason behind the market rally. In 2014, it was substantially driven by FIIs. They bought Rs 97,349 crore that year compared with domestic funds' net buy of Rs 24,033 crore.

In 2017, so far, the position has been reversed. FIIs have purchased just Rs 39,802 crore, while DIIs have outdone them by buying shares worth Rs 76,791 crore. For three consecutive years now, DIIs have bought more shares than FIIs and this has coincided with one of the biggest stock market rallies of this century.

The Sensex and the Nifty have returned 37 per cent and 40 per cent, respectively , since February 28, 2016, and this has been driven largely by DII buying.

One must of course add that absence of major FII selling has also been a factor. With 2223 per cent of floating stock, largescale FII selling could have disrupted the market sentiment but this has not happened so far.

An obvious and related development of this dominance of DIIs has been that stocks with high FII holding have taken a bigger hit than compared with stocks with high mutual funds stake. FIIs hold 31.91 per cent in Indiabulls Real Estate, which is the biggest loser among the BSE200 stocks. The stock has fallen 16 per cent in the past two days. The mutual fund holding in the company was just 1.21 per cent. The second big loser is Dewan Housing Finance. Here, FIIs hold 28 per cent, while MFs have around 4.14 per cent. This is the case for almost top 20 biggest losers among BSE 200 stocks.