FIIs pull out 129 m in a single week

Many leading FIIs had reduced their exposure to India recently. After the downgrading of India8217;s outlook by Standard amp; Poor8217;s, the imminent downgrading of the country8217;s rating by Moody8217;s has now put a spoke on the wheels of FIIs. They allocate funds on the basis of the country8217;s rating. If the rating isdowngraded, then fund flow will also reduce. Moody8217;s and Samp;P8217;s had expressed disappointment at the quot;lack of stepsquot; in the budget to address the country8217;s large fiscal deficit.

quot;The inflationary impact of the budget could lead to a slowdown in demand,quot; said a FII, adding that foreign investors are likely to be disappointed by the lack of specific measures to boost foreign direct investment, especially in the light of sanctions imposed against the country. Besides, there were no specific concessions for the capital market in the budget.