FII investments at Rs 79k cr in 2011

Foreign investors have purchased stocks and bonds worth over Rs 79,000 crore from the Indian capital market in January, 2011, so far, as per data from market regulator Sebi.

Foreign institutional investors (FIIs), whose investments are often called 'hot money' because they can be pulled out at anytime, have purchased stocks and debt securities worth Rs 79,420 crore during the course of the 19 trading sessions conducted in 2011 so far, according to the latest Sebi data.

At the same time, FIIs sold shares and bonds worth Rs 72,910 crore, translating into a net investment of Rs 6,509.60 crore. In dollar terms, FIIs have invested $1.44 billion on the purchase of Indian stocks and bonds in January, 2011, so far.

Overseas investors have been gross sellers of equities worth Rs 4,220.80 crore so far in 2011, but were bullish about the debt market, making a net investment of Rs 10,730.40 crore.

"This year, FIIs have started with a billion dollar mark, inflow has been reduced. They are definitely profit-booking because of factors like high food inflation, rate hike and the negative political scenario in the country," SMC Capitals Strategist and Head of Research Jagannadham Thunuguntla said.

Echoing a similar view, Geojit BNP Paribas Research Head Alex Mathew said, "Short-term investors are exiting India as they turn negative on macroeconomic conditions, while long-term investors are also cautious over the country. Another reason is that European countries are showing some sign of recovery."

In 2010, foreign investors bought stocks and bonds valued at nearly Rs 10 lakh crore, a record for a single year. At the same time, FIIs sold shares and bonds worth Rs 7,80,000 crore during the year -- which implied a record net investment of over Rs 1.75 lakh crore for the year.

In dollar terms, net FII inflows stood at about $39 billion in 2010. In 2009, they had infused Rs 83,423 crore in the stock market.

Significantly, the secondary market barometer, the Bombay Stock Exchange Sensex, has fallen by 2,113.12 points, or 10.3 per cent, in January so far and currently lies below the psychological 19,000 points level.