FIIs pull out Rs 9,600 cr from stocks in 14 days

The reverse flight of foreign funds from Indian stock markets continued for the third straight week, with foreign institutional investors (FIIs) pulling out over Rs 9,600 crore in just 14 days.

Over the 14 trading sessions in the last three weeks, the FIIs pulled out Rs 9,634 crore from the Indian stocks, the data with the market regulator Securities and Exchange Board of India (Sebi) showed.

While they withdrew Rs 943 crore last week, a large chunk of Rs 7,043 crore was drawn out in the week ended January 29 followed by Rs 1,648 crore in the week ended January 24.

Analysts said with the dollar strengthening against the Indian currency, foreign funds are preferring to shift their investments to their home country where they would get better returns.

“The strengthening of the dollar made traders pull out funds from the Indian markets and invest in US dollars which is considered a safe bet for investment,” SMC Global Vice President Rajesh Jain said.

During January, overseas investors were gross seller of equities worth Rs 58,630.60 crore, while they bought shares worth Rs 58,130.30 crore, resulting in a net sale of Rs 500.30 crore, as per the Sebi data.

In the last 14 trading sessions, secondary market barometer the Bombay Stock Exchange’s Sensex fell by 1,639 points, or 9.33 per cent to 15,915.65 points.

“FIIs would remain sideways for sometime. They are preparing for stimulus withdrawal and are expected to invest after budget,” Unicon Financial CEO Gajendra Nagpal said.

In 2009, FIIs were net investors of Rs 83,400 crore in domestic equities, the highest inflow in the country in rupee terms in a single year. It came a year after overseas investors pulled out over Rs 50,000 crore.