FIIs invest Rs 8,000 cr in equities this month

Overseas investors poured in nearly Rs 8,000 crore ($2 billion) in the domestic stock and debt markets this month and analysts feel the positive trend will continue in the coming months as well.

Foreign institutional investors (FIIs) have purchased equities and debt securities worth Rs 43,994 crore so far this month.

However, they also sold shares and bonds worth Rs 36,195 crore in the same period, resulting in a net investment of Rs 7,799 crore, according to the information available with market regulator Securities and Exchange Board of India.

“Investors are coming back to equity markets due to cooling inflation and decline in crude oil prices,” CNI Research head Kishor Ostwal said.

FIIs have put in Rs 6,475 crore in equities so far in July and Rs 1,324 crore in the securities market.

Investors had shunned the stock markets in emerging countries such as India in the first half of this year as these countries battled inflation. Besides, the high interest rate was considered a risk.

FIIs were interested in the debt market in the first six months of the year, making a net investment of Rs 9,948 crore during the period, while their investments in stocks stood at Rs 2,670 crore.

Analysts believe FIIs will continue to bring more money in the coming six months.

“In the long term, FIIs will remain bullish on the Indian market. Moreover, in the next six months, the market will witness more inflows than in the last six-months,” Geojit BNP Paribas Research head Alex Mathews said.

In 2010, foreign investors purchased stocks and bonds worth Rs 10 lakh crore, a record high for a year.

During the same period, FIIs sold shares and bonds worth Rs 7,80,000 crore, which translated into a record net investment of Rs 1,75,000 crore for the year.

The number of FIIs registered with Sebi marginally rose from 1,718 as of December 31, 2010, to 1,728 as of July this year.