Swift, huge dollar gains for FIIs

Foreign investors have seen quick, strong gains up to 28% on broader indices

Foreign investors have seen quick and strong gains of up to 25 per cent on the broader indices and up to 41 per cent on specific stocks in just 15 trading sessions. While the returns in rupee terms have been spectacular for all, almost 10 per cent rupee depreciation has accentuated the returns for foreign investors further.

The Sensex that had touched its 52-week closing low at 17,905 on August 21, saw its intra-day low of 17,449 on August 28, the day when the rupee touched an all-time low of Rs 68.82 to a dollar. Ever-since, the rupee has continued to appreciate (Rs 61.77 to a dollar on Thursday), a gain of 9.96 percent, and the Sensex gained.

As the market had entered the oversold territory since August 21, domestic investors had got into a buying mode, leading to minor gains on the Sensex. Nevertheless, momentum in foreign investors buying came after August 28. (SWEET 16)

A K Prabhakar, senior vice-president, research, Anand Rathi, says with the rupee at 68-plus levels, foreign institutional investors (FIIs) started finding more value in India and started investing. Interestingly, out of 15 trading sessions, FIIs have been net buyers in 11.

P Phani Shekhar, funds manager at Angel Broking, feels FIIs realised the tapering of the quantitative easing by the Fed will not be as harsh as expected. Irrespective of fundamentals, experts feel if funds keep coming, one cannot rule out the Sensex crossing its all time high of 21,207, reached in January 2008.