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Foreign institutional investors (FIIs) have pumped in an estiamted $685 million into stock markets around the ocuntry during the first quarter of the current financial eyar, an asset management company said.

City-based Kothari Pioneer Asset Management company said despite the Kargil conflict and the political uncertainty over the coming Lok Sabha polls, FII inflows during April-June stood at approximately $685 million.

In its latest report, Kothari Pioneer said FIIs fuelled a rally in the Bombay stock Exchange (BSE) sensitive index by picking up cyclical stocks like Reliance, State Bank of India (SBI), Telco and Larsen & Toubro.

However, the FII inflow bypassed previously favoured stocks in infotech, pharmaceuticals and fast moving consumer goods (FMCG) segments, the report said.

 

Kothari Pioneer attributed the heightened activitty in the indian stock markets to improving economic fundamentals in Asia and other emerging markets, which in turn, led to more inflows from fIIs.

"With commodity prices showing improvement the world over, FII interest was keenly felt in cyclical and economy-related stocks which had been beaten down excessively in the earlier sell-off in the region," the report released here said.

Kothari Pioneer, however, indicated tha results the elections in September-October could prove to be a dampner on the future trends in stock markets, especially if the electorate gives yet another fractured verdict.

However, it is of the view that with the economy showing signs of revival in the first quarter and the government projecting robust growth rates in industry and agriculture, the ill-effects of a probable hung parliament would be wiped out.

On the infotechs tocks, the reported said despite the sector under performing the market during April-June, there could be a revival of sorts in the near future depending upon the first quarter results posted by the software companies.

Software major Infosys Technologies had exceeded market expectations by announcing a 106 per cent increase in its net profits for the first quarter of 1999-2000 at Rs 48.96 crore.

The companys total income had risen to rs 184.06 crore during April-June this year from Rs 98.43 crore a year ago, thus boltering market mood for this sector.