FIIs still active on markets

MUMBAI, MAY 5: Foreign institutional investors FIIs who pumped over Rs 1,000 crore into the Indian markets in April are still on a buyi...

MUMBAI, MAY 5: Foreign institutional investors FIIs who pumped over Rs 1,000 crore into the Indian markets in April are still on a buying spree. Massive buying by FIIs 8211; who have already discounted the political uncertainties 8211; has pushed up the Sensex by over 300 points in the last one week.

After Tuesday8217;s 125-point rise in Sensex, FIIs were once again behind the 54-point rise in the index on Wednesday. Notwithstanding the fluid political situation, scrips like Reliance, ITC Limited, Gujarat Ambuja Cements, Dabur, BPL and Britannia are close to their 52-week highs. ITC on Wednesday touched a high Rs 1046 in the intra-day trade to inch close to its 52-week high of Rs 1049 before dropping marginally to close at Rs 1024.

Even though the index is still way below the post-budget high, a number of stocks have touched their 52-week highs. 8220;Many FIIs are focussing on Indian and other emerging markets because the US and other developed markets have already shot up. Dow Jones index of the US has crossed the 11,000 landmark on Tuesday,8221; said a fund manager with a leading FII.

The markets are showing strength and have discounted the news on the political front. Good buying from the foreign institutional investors kept the markets steady discounting and according to a BSE broker quot;there was good amount of FII buying which is discernible from the volumes in the markets todayquot;.

On Wednesday, the BSE Sensex touched a high of 3606 points before closing the day at 3557 points, 186 points away from the 52-week high of 3743. Still, as many as 18 scrips from the BSE8217;s group A were within a striking distance of their 52-week highs recorded in the post-budget rally. Further, scrips like Hero Honda, Lakme, Digital Equipment and Zee Telefilms on Wednesday closed at new highs.

Another factor which has boosted the share prices is the encouraging corporate performance by many leading companies. Several companies like ACC, Reliance and others had come out with higher profits. Marketmen also feel that the stock markets were in an oversold position in the last one month due to political uncertainties.

8220;Valuations have dipped on account of large scale squaring of positions. Net long positions in the market have reduced significantly. This is evident from badla statistics. Badla rates have fallen from a high of around 25 per cent to around 10 per cent. It is this panic squaring off of positions that has led to fall in valuations. The market is oversold. Now the market is correcting itself,8221; said an analyst.

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Analysts feel the FII interest would continue in the next few months. 8220;Whenever the governments had fallen or elections are held, FIIs had bought heavily once the dust settled. FIIs are likely to repeat the performance this year also,8221; said another broker.