Foreign investors are turning more bullish on the domestic markets, with their investments in equities already touching Rs 40,000 crore so far this year--nearly half the record amount infused by them in 2009.

Foreign institutional investors (FIIs) are expected to pour in more money into the local markets in the coming weeks especially with improving economic conditions, according to analysts.

The net investment by overseas investors into domestic stocks reached Rs 39,360 crore ($8.6 billion) till July 16, data available with market regulator Securities and Exchange Board of India (Sebi) showed.

So far this month, these entities have already pumped in Rs 8,283 crore ($1.7 billion.)

In 2009, foreign fund houses pumped in Rs 83,400 crore into the local equities, the highest inflow in a single year.

"India is one of the fastest growing economies and has been resilient in past turbulences. Gains from Indian markets have been higher than many other developed markets and investors would like to put in money here," Elara Capital chairman and chief executive Raj Bhatt said. The London-based Elara Capital is recognised as an FII by Sebi.

Though the Eurozone debt turbulence had led the FIIs to pull out a whopping Rs 9,400 crore from local markets in May, confidence started resuming in June and they infused over Rs 10,000 crore in that month.

FIIs invested a net USD 2.33 billion into domestic markets in the April-June quarter.

"Risk appetite among the foreign buyers is resuming and they are bullish about the India growth story. FII inflow is likely to jump in the coming period," Bonanza Portfolio assistant vice-president Avinash Gupta said.

FIIs play a significant role in the domestic equity markets and their movement (inflow as well as outflow) causes fluctuation in the benchmark indices.

In the past week, they were net purchaser of shares worth Rs 6,590 crore. During the period, the stock market benchmark BSE Sensex recorded a net gain of 0.69 per cent.

"We are bullish about the India growth story and hope it will continue to attract heavy fund inflow from the overseas," Way2Wealth Brokers chief operating officer Sunil Ramrakiani said.

Foreign fund houses were the net seller of shares valued over Rs 52,000 crore in 2008, which triggered a record annual decline. However, in 2009 the story was entirely different. But they again started selling shares in early 2010. In January, they were net sellers worth Rs 500 crore. However, from February, the scenario started changing and they turned net buyers.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end tad higher - Pak will grant MFN status to India very soon - Cipla Q3 net up 16% at Rs 267 cr - Rajendra S Pawar: Small, the new Big for the Indian IT industry - Som Mittal: 100 million to 100 billion in 20 years

Tags : FII | BSE | Sensex | sebi   Read Business news in  Advertisements -  Now property search gets more exciting than ever before! -  We live for our family. have you secured them? -  Financial Learning now made easier and more convenient. -  Earn fuel worth Rs.2400 with Citi -  India's No. 1 Property Site. Click here to know more.. -  Get 5% cashback on telephone bills with Citi -  Exim Bank Conclave on India - Africa Project Partnership. Know more.. -  Be part of it The World's Largest Aircraft. -  Creating Wealth made simple the SIP way. Know more.. -  Only Developer to give a guarantee on time space & rate. -  Office 365 for professionals and small businesses. -  Buy Your Property with Our Triple Guarantee in India. -  Improve Patient Care & Experience. Click here to know more -  Win a Business Class Ticket to Europe..Know more.. -   Introduce a New Automotive Luxury Car.. know more -  Health is Wealth..... Insurance + Savings... Know More...