FIIs infuse Rs 24,800 cr in Dec quarter

The Indian stock markets witnessed a net inflow of Rs 24,800 crore from overseas investors during December quarter in the current financial year.

During the three month period (October-December), foreign institutional investors (FIIs) made a net buy of shares worth Rs 24,807.1 crore, data complied from market regulator the Securities and Exchange Board of India (Sebi) said.

In the quarter under review, December attracted the highest inflow of Rs 10,233.1 crore ($2.1 billion), followed by October (Rs 9,077 crore) and November (5,497 crore).

Interestingly, during December quarter, the stock market benchmark Sensex grew by just 1.97 per cent. During 2009, the barometer registered a rise of 81 per cent.

According to analysis of data available with the Sebi, during the same period (Oct-Dec quarter), FIIs infused a net Rs 6,050 crore in debt instruments.

After their flight last year, FIIs flocked back to bet on the India growth story and poured in a record Rs 83,424 crore in domestic equities during the year just passed.

Marketmen said that FII inflow in India would continue this year as well.

"FIIs will continue to be positive in our markets and in general Indian markets will fare well in 2010," Purpleline Investment Advisors Director P K Agarwal said.

The trend of strong FII inflows to the tune of Rs 31,000 crore (about $6.3 billion) witnessed during April-June quarter gained further during the September quarter of current fiscal and the period witnessed an infusion of hefty Rs 34,313 crore.

FII investment of Rs 83,420 crore in 2009 is the highest ever inflow in the country in rupee terms in a single year and comes a year after they pulled out over Rs 50,000 crore.

The inflow in 2009 broke the previous high of Rs 71,486 crore parked by foreign fund houses in domestic equities in 2007.

Interestingly, the whopping inflow by FIIs into the local stock markets has alarmed the government and other authorities concerned.

The inflow has also made industry chambers like Assocham demanding a two-percentage point tax on FII funds, whereas the exporter body FIEO (Federation of Indian Export Organisations) has asked the government intervention to contain the flow.