Fiis Spot Stability, Up Exposure

Foreign institutional investors (FIIs) are raising their Indian equity exposure, thanks to the receding clouds of war and the message of political stability emanating from the Cabinet reshuffle.

According to the Securities and Exchange Board of India (Sebi) data, FIIs were net buyers on Tuesday, investing a net Rs 16.90 crore. This takes their net inflow in the last six sessions to Rs 274.30 crore. They had pulled out Rs 426.50 crore from the market in the previous eight sessions.

The FIIs have been selective while buying, and feel that the Centre is likely to continue with divestments, after the reshuffle. Dealers said the reshuffle, intended at revitalising the government, sends the message that the government means business.

Additionally, with the WorldCom accounting scandal and its attendant issues rocking the US markets, India is again found to be an attractive investment destination for the US-based emerging markets funds. US stocks slipped further on Tuesday as accounting and terrorism worries prompted investors to sell across the board.

While the Dow Jones industrial average sank by 102.04 points to 9,007.75, a loss of 1.1 per cent, it was the Nasdaq that rocked. The tech-heavy index tumbled by 45.98 points to 1,357.82, a 3.3 per cent decline that left it at its lowest close since mid-1997.

Meantime, there has been marked improvement in the old economy sectors in India for last couple of months indicating a betterment in the overall economic and industrial activity.