Did FIIs get a whiff of the Daiichi sale?

Was Daiichi Sankyo's $3.6-billion exit from Sun Pharma a reason for the foreign institutional selling in the last few days? On Tuesday, Daiichi sold its 8.9% stake in Sun Pharma, India's largest company in terms of market cap, valued at over Rs 20,000 crore through multiple block deals on the stock exchanges.

Speculation has it that FIIs were net sellers in the last few trading sessions partly to shift the money to Sun Pharma. From April 15 to April 20, these investors sold shares worth almost Rs 2,500 crore.

On Tuesday, according to provisional data, FIIs were net buyers of Indian equities to the tune of almost Rs 17,500 crore. Sources said a large chunk of the inflows have been to purchase Sun Pharma shares in the block deals on Tuesday.

Grapevine has it that a large foreign brokerage, which got a whiff of the pricing of the deal, sold Nifty futures ahead of the transactions. The brokerage had built the position in anticipation that the market would crack on account of this large supply of paper in the market.