FIIs invest Rs 2,100 cr in equities in 3 sessions

Bullish foreign fund houses have invested over Rs 2,100 crore in the Indian equity market in the first three trading sessions of this month.

According to market analysts, Foreign Institutional Investors (FIIs) investors are buying the India's economic growth story and country's strong corporate earnings.

Till June 3, FIIs were gross buyers of shares worth Rs 10,425 crore, while they sold equities amounting to Rs 8,323 crore, resulting in a net investment of Rs 2,102 crore, or $467 million, as per the data available with the Sebi.

"At the macro level, India is still among the best macro stories in the world.

People are so much focussed on rising inflation that they ignore the fact that there is real economic growth and robust corporate results," SMC Global Securities Ltd Strategist and Head of Research Jagannadham Thunuguntla said.

Besides, foreign fund houses have infused Rs 144 crore in the debt market. This takes the overall net investments by FIIs into stocks and bonds to a total of Rs 2,246 crore.

In contrast, overseas investors pulled out Rs 6,614.40 crore from the stock market in the month of May, whereas they poured Rs 2,338.4 crore in the debt market during the period, translating into a net withdrawal of Rs 4,276 crore.

So far in 2011, FIIs have made a net investment of Rs 13,942.5 crore in the debt market, whereas they have put in just Rs 200 crore in the equities market so far this year.

While, some analysts are of the view that inflation, crude oil prices, and global factors such as European debt crisis are at centre stage and FII's movement of infusing and withdrawing fresh capital will depend on the news flow.

In 2010, foreign investors made a net investment of over Rs 1.75 lakh crore, a record for a year.