FIIs shift from equities to debt

The ongoing European crisis has shifted foreign institutional investors8217; interest from risky equity markets to relatively safer debt market instruments. Since last month,Foreign Institutional Investors FIIs have invested a huge chunk of their money in the debt market by way of government and corporate bonds and debentures,while their interest in equities has largely turned negative.

FIIs were gross buyers of debt worth Rs 19,376.30 crore in May this year,while they sold debt worth Rs 16,925.80 crore,thus becoming net buyers of Rs 2,450.60 crore of debt,as per data available with market regulator Sebi.

However,during the same period,FIIs were net sellers in the equity market,selling shares worth Rs 9,436.70 crore. Due to the eurozone debt crisis,investors are hedging their euros by buying precious metals and dollars. Following the global turmoil and the increasing uncertainty in the stock markets,foreign investors are trying to seek safety and higher returns by increasing their investments in the debt market.