FIIs pull out Rs 3,200 cr from securities mkt in Nov

Foreign funds withdrew over Rs 3,200 crore from the Indian securities market in the month of November amid concerns over the worsening debt crisis in the euro zone.

According to the data available with market regulator Sebi, overseas investors purchased stocks and debt securities worth Rs 62,296.10 crore and sold securities valued at Rs 65,559.20 crore during the month. This translated into a net outflow of Rs 3,263.20 crore.

Market analysts believe the heavy selling by foreign institutional investors (FIIs) was triggered by the debt crisis in the euro zone. Weakening of the rupee also contributed to the sell-off.

"Euro zone worries have pushed the Indian market into risk aversion mode and other emerging countries are performing better than India, so FIIs are staying from our market," Destimoney Securities Managing Director and CEO Sudip Bandyopadhyay said.

He further said, "We witnessed a similar situation in August and September, now we are seeing a revamp of those conditions."

In November, FIIs withdrew Rs 4,198 crore from the equity market and pumped Rs 935 crore into the debt market.

With this, total FII withdrawals from the equity market in 2011 so far amount to Rs 2,812.10 crore, while their investment in debt has reached Rs 14,112.30 crore.

Overall, FIIs have pumped Rs 17,480.50 crore into the stock and bond market so far this year, compared to about Rs 1,79,674 crore in the whole of 2010.

Mirroring the volatility in the global economy, FIIs were not very consistent while investing in Indian securities. Last month, they invested a hefty sum of Rs 3,079 crore, while they withdrew Rs 1,866 crore in September.

In August, foreign funds pulled out nearly Rs 8,000 crore, or $1.8 billion, from the Indian stock and debt markets -- their highest monthly withdrawal since October, 2008.

The continuous withdrawal of funds by foreign investors is one of the major factors for the sustained decline of the stock market in recent weeks. The BSE benchmark Sensex plunged by 1,581.55 points, or 9%, last month to close at 16,123.46 yesterday.

The number of FIIs registered with Sebi stood at 1,743 as of November this year, while the number of sub-FIIs was 6,187.