FIIs now turn sellers

With the bull party getting over, the interest of foreign funds in Indian markets seems to be waning. FIIs — the major drivers of the m...

With the bull party getting over, the interest of foreign funds in Indian markets seems to be waning. FIIs — the major drivers of the market who took the Sensex to almost 7,000 — have now turned sellers.

Adding to the market fall, FII inflows to the Indian equity markets took a sharp U-turn in last two trading sessions. They have sold equities worth a whopping Rs 1,031.1 crore in just two days, that is, on Monday and last Friday.

On Monday, FIIs were net sellers to the tune of Rs 456.70 crore, after being record sellers on Friday at Rs 574.40 crore. Friday’s selling was the highest single-day selling in calendar year 2005. The Sensex shed a total of more than 300 points on the two days. If the bearish trend remains, FIIs will pull out more funds, analysts say.

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Of the 11 trading sessions till Monday this month, FIIs have been sellers on four occasions. The quantum of buying also has dipped. The highest single-day net buying in equities was witnessed on April 13, when FIIs were net buyers at Rs 176.4 crore. FIIs crossed the Rs 100-crore mark only on two occasions.

This month also saw FIIs turn net sellers for the first time in the calendar year. FIIs are net sellers at Rs 58.30 crore as on Monday. FIIs have invested Rs 16,170.10 crore (nearly $3.7 billion) in the current calender year.

On Tuesday, bulls were stopped in their tracks and a smart recovery in intra-day trades was belied following disappointing quarterly results from tech major TCS. The benchmark Sensex plummeted by 133 points in the intra-day session to close down by 22 points. While techs declined, metal and automobile stocks also lost ground towards the close of the session after early gains. Heavyweights contributed to the weakness of the market. Power and pharma stocks managed modest gains.

Up nearly 113 points at one point, the 30-share BSE Sensex eventually ended with a loss of 21.92 points at 6,134.86. From its all-time high of 6,954.86 touched in intra-day trades in March, the benchmark index has till date lost a whopping 820 points.