Business Standard

FIIs pull out Rs 777 cr in Apr, 1st monthly outflow in 4 months

Market experts cite govt's anti-tax avoidance rule (GAAR) proposal, S&P's negative credit outlook for flight

Related News

After pouring hefty funds into the Indian equity market in the first three months of the year, overseas investors turned bearish in April and pulled out Rs 777 crore amid S&P lowering India's credit outlook to negative from stable.

This was also the first instance of monthly net outflows by FIIs since November 2011.

In the current month so far, Foreign Institutional Investors (FIIs) made gross purchase of equities worth Rs 39,008 crore and sold shares valued Rs 39,785 crore translating into a net outflow of Rs 777 crore, according to data available with the market regulator Sebi.

Market experts attributed the outflow to a host of factors including government's anti-tax avoidance rule (GAAR) proposal announced in the Budget that has been the real dampener for several FIIs whose clients had used participatory-notes to invest in the Indian stock market.

The sentiment was further soured by ratings agency S&P's move to lower India's outlook to negative from stable, citing slow progress on its fiscal situation and deteriorating economic situation, experts added.

In fact after S&P's move, FIIs have withdrawn nearly Rs 1,300 crore from the in the last three trading sessions.
   
In the first three months of 2012, had invested a record Rs 43,951 crore. Of this, Rs 10,358 crore was poured in January, Rs 25,212.10 in February and the rest Rs 8,381 crore in March.
   
The strong FII inflows in January-March period was attributed by marketmen to the Reserve Bank of India's (RBI) pause in rate hikes and the improving liquidity position.
   
During April, foreign fund houses pulled out Rs 777 crore from the stock market and Rs 2,111 crore from the debt market, taking the collective net outflow by FIIs in stocks and bonds to 2,888 crore.
   
FIIs, the main drivers of the markets that gained nearly 13% in the first three months of 2012, have turned negative on equity so far this month.
   
After taking the latest withdrawals into account, FIIs still left with an investment of Rs 43,173 crore into the equity market so far this year and Rs 17,287 crore into the debt market during the same period.
   
For the calender year 2011, FII pulled out over Rs 2,700 crore from the equity market.
   
The 30-scrip barometer Sensex has fallen 217 points, or 1.24 %, this month till April 27, to close at 17187.34 points.

Read more on:   
|
|
|

Read More

Credit ratings fell the most in three years: CRISIL

According to CRISIL, the Indian arm of Standard & Poor which rates over 9,000 issuers in India, credit ratings have fallen the most in three ...

Quick Links

 

Market News

Oil resumes slide in Asian trade

Investors wait for more signs of economic growth in Europe

Markets closed on account of Diwali Balipratipada

Indian equity, forex, money and commodity markets are shut today on account of Diwali Balipratipada.

Adani stocks led the way in Samvat 2070

Ambani brothers, JSPL the bottom three in market-cap growth

Raising the output key to Cairn India's prospects

With crude oil prices benign, increasing oil and gas production is crucial to drive growth

Biocon sees muted quarter, lacks immediate triggers

Reduced exports to West Asia & North Africa, capacity constraints affect sales

Back to Top