Is the bull run over? Foreign institutional investors (FIIs) who led the bull run till now seem to have taken a U-turn. The problems at US securities broker Refco have added fuel to the fire with bears preparing for a comeback.After investing about $8.6 billion (around Rs 37,500 crore) in the Indian equity markets during January-September this year, foreign funds have suddenly turned net sellers offloading shares worth Rs 1,000 crore in the last nine trading days, according to Sebi data. “Weakening rupee, fall in global markets, rise in dollar value abroad, high valuations in India and concern over US economic growth have prompted FIIs to press the sales button,” said a fund manager.According to a fund manager, FIIs can pull out their funds quickly. “Investors, who enjoyed the bull run during the last few months, should be careful about the “hot money” of FIIs moving out of the country quickly,” said the research head of a local broking firm.The benchmark Sensex has fallen by 339 points on Thursday and Friday. The maximum sell-off was witnessed on October 7, when FIIs junked shares worth Rs 568.50 followed by Rs 399.60 crore on Friday. The Refco episode is another concern. Both the BSE and the NSE have asked US brokerage firm Refco’s local units not to increase their positions pending developments in its US parent company, which is teetering on the edge of collapse.Refco Sify Securities India Pvt Ltd and Refco Capital India Pvt Ltd are the two local units of Refco Inc, which trade in the cash and derivative segments of the stock exchanges.But the local units said on Sunday they were insulating themselves from the parent company’s woes by deciding not to transfer any funds to the global companies of Refco Inc. Market sources said investors who got participatory notes (PNs) from Refco might have sold in the last few days.
