As per data available with market regulator Securities and Exchange Board of India, foreign institutional investors (FIIs) have made net purchases of domestic equities worth Rs 1,00,574.20 crore till date this year.
Going by the pace of foreign fund inflows, analysts are bullish about continuation of the trend in the near term, given that the country is one of the hottest destinations for investment by overseas fund houses.
FII investment of Rs 1,00,574.20 crore so far this year is the maximum garnered by the domestic market in a single year.
Last year, FIIs were net purchasers of shares worth Rs 83,423 crore. During the same year, the stock market benchmark Sensex had recorded a gain of over 80 per cent.
FII inflows are primarily responsible for the surge in the domestic equity market. FIIs have been pumping funds into emerging markets like India on account of their strong growth prospects and fundamentally sound companies.
Indian bourses picked up significant momentum during the second quarter of current fiscal, driven by FII inflows. This helped the stock market breaking out of the tight range it was confined to in the previous three quarters.
Analysts believe the government's plans to disinvest in public sector companies, including state-run Coal India Ltd, will give more investment opportunities to FIIs.
"India is well on the path of reverting to its high- growth orbit in the current uncertain global environment. Thus, India would continue to attract global fund inflows, driven by its resilient domestic economy," brokerage firm Angel Broking said in a note.
In its biggest one-day gain in five months, the stock market benchmark Sensex today zoomed by a whopping 484 points to a 33-month high of 20,687 on record inflows from foreign funds and a firm overseas trend.
The Bombay Stock Exchange's 30-share barometer closed the day up by 484.54 points, or 2.4 per cent, at 20,687.88 -- its best close since January 14, 2008, when the index had ended at 20,728.05.
The National Stock Exchange's 50-share Nifty index also spurted by 2.31 per cent to close at 6,231.50 today.