Foreign Institutional Investors (FIIs) stayed away from Indian equities in 2011, but have already shopped for stocks worth $1.16 billion (or Rs 6,007 crore) in the first month of 2012.
Between January 2-20, foreign investors infused $1.16 billion, or Rs 6,007 crore, into the Indian equity market, but were more bullish on the debt market, making a net investment of Rs 15,933 crore during the same period, according to data from market regulator Sebi.
Market experts believe that rupee strengthening and easing concerns over inflation and economic growth have helped foreign investors step up buying in recent sessions.
Analysts said the weak earnings outlook is only a matter of concern in the short-term, as conditions may improve in line with changes in the domestic and global macro-environment.
FIIs purchased gross equities and debt securities worth Rs 55,902 crore and sold shares and bonds to the tune of Rs 33,962 crore during the period, translating into a net investment of Rs 21,940 crore, Sebi added.
This is the third straight week of inflows into the Indian stock and debt markets by overseas investors.
Buoyed by sustained FII inflows, the stock market barometer BSE Sensex has gained around 1,284 points, or 8.30%, so far in January. In the last trading session, the key BSE index finished at 16,739.01, up 95.27 points from its previous close.
In the year 2011, FIIs purchased stocks and bonds worth Rs 8 lakh crore, but sold securities worth Rs 7.9 lakh crore, resulting in a net investment of Rs 17,480 crore during the year.
Investors flocked toward the debt market in 2011, making an investment of Rs 20,293 crore, but stayed away from the equity market, pulling out Rs 2,812 crore.
