FIIs pour in $4 bn into equities in Feb so far

Analysts attribute strong FII inflows to signs of RBI easing interest rates and the subsequent impact of improved liquidity position

Overseas investors have pumped in a staggering $4 billion into the Indian stock market in the first two weeks of February, taking the investment tally to $8 billion for calendar year 2013 so far.

Foreign Institutional Investors (FIIs) infused a net amount of $3.95 billion (about Rs 21,058 crore) in Indian equities in February so far, taking the total for the year to $8 billion (Rs 43,117 crore).

Market analysts attributed strong FII inflows to signs of RBI easing interest rates and the subsequent impact of improved liquidity position.

Additionally, a slew of measures taken by the government, including the postponement of GAAR (General Anti Avoidance Rules) implementation by two years to April 1, 2016 and partial decontrol in diesel prices, have also attracted foreign investors.

During February 1-15, FIIs were gross buyers of shares worth Rs 51,722 crore, while they sold equities amounting to Rs 30,664 crore, translating into a net investment of Rs 21,058 crore ($3.95 billion), as per Sebi data.

Foreign fund houses also infused Rs 913 crore ($170 million) in the debt market in February. This takes the overall net investments by FIIs into debt markets to Rs 3,860 crore ($721 million) so far this calendar year.

"FIIs have been betting high on Indian equities for the last six-seven months and reform measures taken by the government has further boosted the sentiment," Wellindia Executive Director Hemant Mamtani said.

"Besides, FIIs have been infusing money into the Indian market on account of change in RBI's monetary policy that have added liquidity to the system. This liquidity will help in growth of the country," he added.

FIIs bought equities worth $24.4 billion in 2012, about $5 billion below record purchases two years ago.

As on February 15, the number of registered FIIs in the country stood at 1,757 and total number of sub-accounts was 6,341.