Foreign investors buy net Rs 651 crore of stocks

Overseas funds bought a net Rs 651 crore ($133 million) of equities yesterday, taking their total investments in equities this year to Rs 36,220 crore, according to the nation’s market regulator.

Foreigners bought Rs 3,680 crore of shares and sold Rs 3,030 crore, the Securities & Exchange Board of India (Sebi) said on its website on Thursday. The flows helped the benchmark BSE India Sensitive Index complete its second straight monthly gain yesterday for the first time since September 2010.

Offshore investors bought a net Rs 1,040 crore of bonds, taking total flows into debt this year to Rs 27,030 crore, the data show. They put Rs 42,100 crore in debt in 2011. Foreigners have invested Rs 4.806 lakh crore in stocks and Rs 1.478 lakh crore in bonds since they were allowed into the country in 1993.

The country’s $1.3 trillion stock market, Asia’s fifth-biggest, is influenced by flows from abroad. Inflows surged to a record in 2010, making the Sensex the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led the biggest annual slump of 52 per cent.

Offshore funds pulled out Rs 2,710 crore from local equities last year, compared with record flows of Rs 1.33 lakh crore in 2010, as Europe’s debt crisis threatened the global economy and cooled demand for emerging-market assets.