Adopting a bullish stance on India,overseas investors have pumped over Rs 12,000 crore into the Indian equity market this month so far.
Foreign institutional investors (FIIs) were gross buyers of shares worth Rs 15,362 crore,while they sold equities amounting to Rs 14,104.50 crore,translating into a net investment of Rs 12,57.30 crore (USD 258 million) thid month till March 9,as per the data available with market regulator Sebi.
Since the beginning of 2012,FIIs have infused a total of Rs 36,827 crore (USD 7.42 billion) into the Indian stocks. The net inflow was USD 5.12 billion during February and USD 2 billion in January.
Analysts attributed robust FIIs inflow in the domestic market to the lack of alternative investment destinations available to investors,given the debt problems in European countries and slowdown in economic activity in emerging markets.
In addition,sharp depreciation in rupee’s value in the second half of 2011 could have deterred foreign investors from taking funds out from India.
The foreign fund houses have withdrawn Rs 1,444 crore in the debt market so far this month. This takes the overall net investments by FIIs into Indian debt markets to Rs 24,543 crore (USD 4.8 billion) for this year.
Strong surge in FII inflows in 2012 so far has helped boost the equity markets,as also the rupee. The stock market barometer Sensex has gained over 13 per cent in 2012,despite a fall of about 1.4 per cent this month. The index finished at 17,503.24 on Friday.
FIIs mostly stayed away from Indian equities in 2011. They flocked towards the debt market last year with a net investment of Rs 20,293 crore,while pulling out Rs 2,812 crore from equities.