FIIs invest Rs 1.09 lakh cr in stocks in FY10

Overseas investors poured in over Rs 1,09,300 crore in Indian stock markets during the financial year 2009-10, and analysts feel the positive trend will continue in the coming months.

According to an analysis of the data available with the capital market regulator Sebi, foreign institutional investors (FIIs) were net buyers of shares worth Rs 109,303.9 crore in this fiscal till March 30, 2010.

In contrast, during last financial year (2008-09) foreign fund houses had offloaded shares worth Rs 47,706.2 crore.

In 2007-08, FIIs had parked in a whopping Rs 53,000 crore in the Indian stock markets.

During the this fiscal, the Bombay Stock Exchange's benchmark Sensex gained over 80 per cent from 9,708.50 points as on March 31, 2009.

"The recovery in the capital markets during the year 2009 has been outstanding. This was largely helped by FII inflows," SMC Capitals' Equity Head Jagannadham Thunuguntla said.

"Unless something dramatic happens in the national or the international markets, there is no reason why not to believe that flows would continue," he added.

Significantly, by December 31, 2009, FIIs' net investment in the domestic bourses had touched a record Rs 80,500 crore, the highest ever inflow in rupee terms in a single year.

During the first three quarter of the outgoing financial year, foreign funds put in over Rs 89,500 crore in Indian equities.

The total investment made by FIIs in the domestic equity market in the April-December period of 2009 stood at Rs 89,576 crore. These fund houses had pulled out a net Rs 41,555 crore from Indian stocks in April-December period of 2008-09.

In the latest quarter (January-March), FIIs have put in a 19,803.90 crore.

Marketmen said the a weak dollar against rupee and government's massive divestment plans will attract more inflow in the coming months of the next fiscal.

"In coming quarters also, inflow from FIIs will be robust as they are bullish on the government's policies regarding the curb on the fiscal deficit," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.

"The lined up public divestments will also provide a good opportunity for FIIs as they have investment plans for the Indian equity markets," he added.